EDAM and Emerging Energy Markets in the West
CAISO’s upcoming EDAM market is one of the most significant market evolutions in recent years. Since it was initially envisioned, MCG Energy has been closely monitoring the market design and tariff process to ensure MCG Energy’s solutions are ready for EDAM on day one, and our users have an achievable path to market implementation.
CAISO EDAM Energy Market News
New wholesale energy markets are exciting for the energy industry and are providing significant benefits to consumers. Several new energy markets were established in recent years. The Southwest Power Pool (SPP) went live with the SPP Integrated Marketplace (SPPIM) in 2014, and the Western Energy Imbalance Service market (WEIS) in 2021. The California Independent System Operator (CAISO) also opened the Western Energy Imbalance Market in 2014. Planning for energy in the West is more critical than ever. Faced with these challenges, additional new western markets are poised to emerge – not only CAISO’s Extended Day Ahead Market (EDAM) but also SPP’s Markets+ and RTO West. Both CAISO’s and SPP’s efforts are designed to improve both the reliability and the affordability of energy.
MCG Energy’s EDAM CAISO Updates
Rolling out software tools to engage with these new energy markets is extremely complex, and is first among the reasons why engagement of energy solution providers is so crucial. MCG is on track to ensure that the MCG Energy Software Suite is ready to be deployed to early adopters in each of these new markets. In the long run, new markets mitigate risk by improving avenues for delivery and decreasing cost. However, there are potential risks even as existing markets continue to fulfill the needs of consumers and producers in the short term. While watching the planning and proposed make up of these new markets, the industry is monitoring changing timelines for bringing them live as well as the efforts of neighboring markets to attract utilities, producers, and transmission companies to join them.
The Energy Day Ahead Market (EDAM)
Both EDAM and Day Ahead Market Enhancements (DAME) are developments CAISO has rolled out to add new benefits to day-ahead market operations. EDAM is designed to leverage features of CAISO’s day-ahead market and the WEIM, making a robust day ahead market available to entities outside of the CAISO footprint for the first time. It will include market products and processes that have succeeded in other US markets that have been highly desired by other Western stakeholders.
CAISO’s goal for EDAM is to reduce the cost of energy to consumers by increasing cooperation and inclusion of renewable resources across balancing areas (BAs) in the WEIM. The plan is for areas at peak need to draw surplus energy from other BAs, in order to reduce the need for greater production. If communication and cooperation increase across the region, it may improve reliability by more accurately predicting the next day’s need. CAISO also says there will be environmental benefits from sharing excess renewables across regions, reducing the need for curtailment of clean generation.
If successful, CAISO anticipates EDAM will result in annual savings of over $540m from reduced energy production costs, and reduced CO2 emissions equivalent to more than 630,000 fewer cars on the road.
Who Will Join EDAM?
While speculation continues on which entities will join the new CAISO or SPP markets, a breakthrough came on December 8, 2022 when – on the same day that CAISO posted its final draft of the proposal for the new market – PacifiCorp announced it would be joining EDAM. As of August 30, 2023, both the Balancing Authority of Northern California (BANC) and the Sacramento Municipal Utility District (SMUD) recommended EDAM as their preferred option for day ahead market participation.
Currently, CAISO is planning EDAM market trials in Fall 2025, with full implementation of the market in Spring 2026. Business Requirements and Market SIM Scenarios are now posted on the CAISO Release Planning page. After a brief delay, CAISO plans to have Technical Specifications available in late November 2023.
MCG Energy – Your Resource for Working in EDAM
It’s full speed ahead at MCG. We couldn’t be more excited!
David Peterson, Ph.D. is the content specialist for MCG Energy Solutions.