Opinion on Integration : Market and Product Review , Phase 1

The Market Surveillance Committee (MSC) of the California Independent System Operator has been asked to provide an opinion on the three components of the Nov. 4, 2011 Draft Final Proposal for the Renewable Integration: Market and Product Review, Phase 1. The purpose of that proposal is to identify modifications to the market rules that could be quickly implemented in order to facilitate integration of variable renewable power sources into the ISO markets. The fundamental concern being addressed is the potentially inadequate amounts in real-time of economic bids during periods of very low (i.e., negative) prices. Such inadequacies are experienced occasionally at present, and are anticipated to increase significantly in frequency as more renewable resources come on line. The economic consequences of inadequate economic bids when prices are negative is that additional within-CAISO thermal resources are required to be committed rather than less expensive imports so that decreases in loads in real-time can be accommodated by dispatching those resources downward. With a deeper pool of economic bids, including bids from renewable generators, it will become less expensive for the ISO to procure decreases in generation when needed under negative prices.