This blog is reposted from Western Resources Advocates.
Western Resource Advocates commends the approval today of the Extended Day-Ahead Market, or EDAM, by the California Independent System Operator (CAISO) Board of Governors and the Governing Body of the Western Energy Imbalance Market (WEIM). Implementation of the EDAM has the potential to provide significant reductions in greenhouse gases that are driving climate change and can also reduce costs, as fewer fossil fuel plants are brought online each day.
The new market must still be approved by the Federal Energy Regulatory Commission, which is expected to occur later this year. If approved by FERC, the CAISO Board of Governors and Governing Body of the WEIM will have joint authority over EDAM.
“The approval of the Extended Day-Ahead Market is an important milestone in the evolution of Western energy markets,” said Vijay Satyal, deputy director of regional energy markets at WRA. “The EDAM will help the region address climate change by making it easier and less expensive to bring clean energy resources onto the grid in a reliable manner.”
In a day-ahead market, participants purchase and sell energy for next-day operations. The coordination of resource supply with forecast demand reduces the number of generators that must be started at the beginning of each day, thereby cutting fuel costs and reducing fossil fuel emissions, while supporting renewable energy integration.
More than 80% of load in the Western Interconnection is expected to be served through the WEIM by the end of 2023. A study by the firm Energy Strategies estimated that EDAM can create annual savings of up to $543 million from reduced power production expenses.
The EDAM builds upon the WEIM, a real-time energy imbalance market established by PacifiCorp and CAISO in 2014. Since its inception, 19 utilities in 10 states have joined the WEIM, and it has produced more than $3 billion in economic benefits.
In December, PacifiCorp announced plans to join the EDAM. If approved by federal regulators, the EDAM will begin operation late in 2024 or early 2025 and connect both PacifiCorp and CAISO – the two largest grid operators in the West – potentially unlocking large amounts of clean energy resources with an expanded transmission network.
“We hope that PacifiCorp’s entry will encourage other utilities to join this market,” said Satyal. “This is a critical step to enable decarbonization across the West with transparency and efficiency, improving the quality of life for millions.”