The Cal ISO-PacifiCorp deal — Getting more green energy on the grid

The best way to integrate wind and solar energy onto the electric grid — without creating big spikes that require the frequent firing-up of natural gas peaker plants to even things out – is to spread out the renewables over as wide a geographic area as possible.

So, in the case of California, if the wind’s not blowing in the San Gorgonio Pass, it might be nice and breezy up north in the Alta pass; ditto for sun in east Riverside versus San Bernardino or Kern counties.

The California Independent System Operator (ISO), which manages the main grid in the state, is taking this concept a step further. The agency on Tuesday announced a memorandum of understanding with PacifiCorps, a utilitythat serves customers in Washington State, Oregon, Idaho, Wyoming and Utah, to create something called an Energy Imbalancing Market or EIM.

PacifiCorp is owned by MidAmerican American Energy Holdings Company, owned by Warren Buffett.

So what the EIM will do is allow the ISO, at times of peak demand, to tap into PacifiCorp’s renewable resources, which include more than 2,000 megawatts of wind energy, much of it located in Wyoming.

“This opportunity is something that will resonate through the West where we are on this constant march to integrate renewables into the system while maintaining best rates,” said Steve Berberich, Cal ISO’s CEO, during a press call Tuesday morning. ”We can ultimately share resources efficiently over a much wider footprint.”

The way things work now is that the ISO has a super-charged system that balances energy supply and demand every five minutes, picking energy sources at lowest cost to meet energy needs on the grid. But, beyond the ISO grid, utilities such as Southern California Edison still have to maintain regional balances between supply and demand with manual systems.

The EIM will allow other utilities, such as PacifiCorp, to tap into the five-minute market to even out times of over- or undersupply and ease stress on local utilities.

Widening the footprint from which ISO can draw power should also lower costs. If wind or solar power is available from Wyoming to fill a gap in peak power demand here, that could mean less need to fire up natural gas peaker plants, which are an extremely expensive source of backup power.

The system will run both ways, so any excess renewable power in California could be sold out of state.

Exactly if or how this will affect our energy bills has yet to be determined. Berberich said the cost to set up the EIM will be a “modest” $2.1 million, but projections on savings are still being calculated.

The MOU announced Tuesday is the first step in what could be a lengthy process. The ISO has scheduled a meeting for stakeholders to gather public input on Feb. 27 and the ISO board will also have to give its OK to move forward with the EIM, tentatively at its March meeting.

The system will likely not be online and working until 2014, so it’s not going to be an easy solution to filling in Southern California’s energy needs this summer if the San Onofre nuclear power plant stays off-line as it seems more and more likely it will.

Certainly there will be problems to iron out, unintended consequences to be manged, but the potential is exciting and enormous. A regional EIM covering the Western states could be possible in the future, making integration of wind and solar less of a problem across the region.

You can follow the implementation of the EIM, and daily supply and demand balancing  on the grid with the ISO’s new free smart phone app, ISO Today,