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Market Characteristics for Efficient Integration of Variable Generation in the Western Interconnection

The Western Electricity Coordinating Council (WECC) convened the Variable Generation Subcommittee (VGS) in 2009. The VGS was commissioned to address all issues related to the predicted increasing penetration of variable generation (wind, solar, and potentially others as discussed below) on reliability, both in the operating and planning time frames. The VGS was split into four Work Groups: Operations, Planning, Markets, and Technology. The Markets Workgroup was tasked with developing a white paper to address the role of electricity markets to help manage variable generation (VG). As part of the white paper effort, prior work from the National Renewable Energy Laboratory (NREL) was used to provide evidence of how markets help with reliable power system operation, both with and without VG. This report, adapted from prior reports and research by the authors and others, was used in the VGS Market White Paper. It is published here as a separate report, free from the space limitations of the VGS White Paper.