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Minutes Matter in the Energy Imbalance Market

An energy imbalance market (EIM) is a voluntary market that provides a sub-hourly economic dispatch of participating resources for balancing supply and demand every five minutes. One such market is the Western EIM, which the California Independent System Operator (CAISO) began operating on Nov. 1, 2014. CAISO claims the Western EIM enhances grid reliability and improves the integration of renewable energy, which leads to “a cleaner, greener grid.”

The Western EIM has grown from meager beginnings—initially optimizing only the CAISO and PacifiCorp balancing authority areas—to a footprint that now includes parts of eight states and a portion of British Columbia, Canada. It has 11 active participants, with Salt River Project and Seattle City Light entering the fold this year, and 10 more participants are slated to join by the end of 2022.

By all accounts, the market has been a huge success. From its launch through April 2020, CAISO reports the Western EIM has generated $919.69 million in gross benefits for its participants. However, participating in the market keeps power companies on their toes. The sub-hourly five-minute increment dispatch market means generating units need to hit their output targets consistently. If they don’t, the company must pay.

Challenges Hitting Targets

Arizona Public Service (APS) began participating in the Western EIM in October 2016. As a result, the company has benefited to the tune of more than $150 million, according to CAISO’s records. But until APS implemented a unit monitoring tool, managing power generation wasn’t always easy.

“Prior to the unit monitoring tool, compliance was managed off of our automatic dispatch, or dispatch screen, which basically consisted of a series of tables and a single graph,” Andre Norwood, senior engineer with APS, told POWER. “The problem we had with that was the operators found it a little bit cumbersome and difficult to do.”

Therefore, deviations were only being identified by the power traders or the balancing authority. They would in turn notify the generating units that dispatch instructions weren’t being followed consistently, which was a problem. Furthermore, APS wasn’t able to identify or correlate trends to different modes of operation, because it didn’t have the necessary data available to accomplish that task.

“From a marketing standpoint, our drive is to have the unit work within the parameters that we provide to the energy imbalance market and to our balancing area, and anytime the unit can’t achieve the targeted dispatch, then something out there is sub-optimal,” said Tim Rusert, director of Fuel Procurement and Resource Operations Support with APS. That can mean another unit is forced to start unexpectedly, which is costly and inefficient.

A Tool to Optimize Operation

That’s where the unit monitoring tool came in. KBC (a Yokogawa company) was implementing OSIsoft’s PI System for APS, so it was natural for the companies to work together on the tool.

“Our consultants are subject matter experts in implementing those types of monitoring solutions for electric utilities,” Marc Diamante, program manager with KBC, said. “We bring practical experience to the table. KBC’s folks have worked in plants and they’ve worn hard hats. They’ve stood in the control room. So, we were a very good fit based on the timing.”

“The unit monitoring actually started off as a proof of concept,” Norwood said. “What KBC brought to the table was its experience in relational database, putting that data in a nice visualization. And really, what’s important from a monitoring and diagnostics standpoint, gleaning events from that information and giving summaries.”

Diamante explained that after more than three years of use, the tool is well beyond the proof-of-concept stage. The base product KBC built measures dispatch compliance against unit operating limits and performance. It also tracks the operating modes utilized by the energy control center and operations. It provides trending capabilities and allows easier data visualization. Late last year, enhancements were made that include unit dispatch and startup metrics. KBC’s goal was to provide even more historical and granular information for APS’s team to analyze so operators could further improve unit performance.

Continuous Improvement

APS uses the unit monitoring tool on a total of 40 coal, combined cycle, and combustion turbine units. The tool is also being considered as an option for solar and wind projects. And more improvements may be coming soon.

“It’s a journey,” Diamante said. KBC is collecting data to further support analytics from a fleet performance perspective. “We’re integrating with tools like Power BI [a Microsoft product], so we get advanced analytic capabilities, accumulating lots of historical data. There’s a pretty significant potential with a very large amount of historical data to start looking at leveraging machine learning out into the future—take it to the next level with even more advanced technologies than what we have been using up to this point,” he said.

Prior to joining the EIM, APS was simply in a non-organized bilateral market, which was based on hourly transactions. Any differences could be made up for by moving other units’ generation around. In the EIM, however, if the company doesn’t hit its five-minute target, APS is faced with a financial impact.

“The ultimate benefit that we’re achieving with this tool is a much more precise unit operation window of knowing what our units can do and hitting the numbers,” said Rusert. “If a market operator asked for a unit to be at 250 MW, and we hit the 250, that’s a win. Otherwise, if we’re at 245 or close, we’ve got to make that up with something else.”

“Minutes matter in the energy imbalance market,” said Diamante, so having a tool to keep units on target is a must. ■

Aaron Larson is POWER’s executive editor.

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