WRAP: New forecasting requirements for Western states’ resource adequacy coalition

The Western interconnection is unique for three big reasons.

First, among North America’s three major grids, it relies the most heavily on electricity transported over very long distances. This is partly a function of geography: long high-voltage lines connect generation with the major population centers spread out along the California coast. It’s also a result of the West’s reliance on hydro power from the Pacific Northwest, which generally has excess supply in spring and summer, when demand is low in that region but high in sunny California.

Second, nearly 87% of the land comprising the Western Interconnection is public or protected land. If you compare this to the 27% public land across the Eastern, Texas, and Quebec Interconnections, you’ll see that planning anything new is likely to involve multiple local and federal agencies, logistical challenges, and ecological and cultural considerations, making projects much more difficult.

Source: WECC

Third, the Western Interconnect has historically been more fragmented than the other grids in North America. The Western Energy Imbalance Market (WEIM), for instance, turns ten years old just this year. As a result, there are relatively more balancing authorities (BAs) in the West.

As coal plants are retired and load growth looms, those historically solo balancing authorities must rely on sufficient-but-intermittent renewables that vary widely from region to region. Wind, solar, and hydro resources each produce energy during different seasons and geographic areas; to keep the lights on, they must work together across long distances.  

What is WRAP?

The Western Resource Adequacy Program (WRAP), a program of the Western Power Pool (WPP), is “the first regional reliability planning and compliance program in the history of the West.” It is quite new: planning began in 2018, and rollout began in 2020. Its two main sections establish common methods for long-term planning and short-term operations, respectively.

Forward Showing (FS) Program  

The FS Program is the long-term planning component of WRAP. This is an effort to standardize long-term capacity planning efforts across participants. Essentially, it prescribes certain aspects of long-term demand modeling, so that everyone is planning in a consistent manner. For example, it establishes deadlines for completing planning activities each year, so that everyone’s calendar lines up.  

Notably, it mandates that reliable planning reserve margins be procured, which is calculated based on participants’ P50 load. And it defines LOLE (loss of load event) threshold as the reliability metric that must be met in participants' long-term plan, stipulating that this must be modeled using probabilistic load forecasts. Participants even agree to certain monetary penalties if they don’t meet these guidelines.

Operational (Ops) Program

The Ops Program creates short-term power-sharing commitments.  

First, it sets up a centralized monitoring of the load-resource balance across WRAP participants. Then, it requires all participants to procure load forecasts for real-time, day-ahead, and six days beyond day-ahead. Each participant then commits to sharing resources on these time horizons. This means that if one participant is projecting a supply deficit at any time between the present moment and day-ahead plus six, any participant with excess supply must satisfy the shortage before they sell that excess to the market.

As you can imagine, investing in an accurate load forecast will be a show of good faith as WRAP facilitates new relationships between load-serving entities.

Getting with the program

Increased cooperation between balancing authorities in the West is already bringing increased reliability and cleaner energy to ratepayers, even as loads grow, and weather becomes less predictable.  

But, to comply with WRAP requirements, everyone will need to be working from accurate forecasts: long-term forecasts for complying with the FS Program, and short-term forecasts for participating in the Ops Program. If you’re a market participant in the West monitoring the load-resource balance, we’d love to talk.


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