Does anyone care about rising redispatch costs?
Regional transmission organizations (RTOs) or independent system operators (ISOs) dominate the major power grids of North America, with the notable exceptions of the Southeast and Pacific Northwest. The Federal Energy Regulatory Commission (FERC) has been a strong advocate of RTOs as a way of opening access to the power grids and improving system reliability. The power grid obviously requires active, hands-on management to ensure system reliability, but even that has not been sufficient to prevent major outages. New rules put in place following the last major blackout put more teeth into reliability.
The purpose of this article is not to criticize system reliability but to highlight the more pervasive challenge today and for the future: Controlling the cost impact of decisions by grid operators on energy market participants. Here, as elsewhere, the law of unintended consequences is alive and well, as procedures put in place to avoid outages at almost any cost have the consequence of raising the overall cost of operations through rapidly rising congestion costs.
Consider a few examples.