The Intermittent Renewable Management Pilot - Phase 2 (IRM2) was designed to study the feasibility of demand-side resources to participate into the California Independent System Operator (CAISO) wholesale market as proxy demand resources (PDR). The pilot study focused on understanding the issues related with direct participation of third-parties and customers including customer acceptance; market transformation challenges (wholesale market, technology); technical and operational feasibility; and value to the rate payers, DR resource owners and the utility on providing an enabling mechanism for DR resources into the wholesale markets.
The customer had the option of committing to either three contiguous hour blocks for 24 days or six contiguous hours for 12 days a month with day-ahead notification that aligned with the CAISO integrated forward market. As a result of their being available, the customer was paid $10/ kilowatt (kW)-month for capacity in addition to CAISO energy settlements. The participants were limited to no more than a 2 megawatt (MW) capacity with a six-month commitment.
Four participants successfully engaged in the pilot. In this report, we provide the description of the pilot, participant performance results, costs and value to participants as well as outline some of the issues encountered through the pilot.
Results show that participants chose to participate with storage and the value of CAISO settlements were significantly lower than the capacity payments provided by the utility as incentive payments. In addition, this pilot revealed issues both on the participant side and system operations side. These issues are summarized in the report.