Impacts of integrating wind resources into the California ISO market construct

California's enactment of a 20% Renewables Portfolio Standard (RPS) by 2010 and an announced policy preference for an increase to 33% by 2020 poses operational and electricity market challenges associated with integrating such high levels of renewable resources into the state's existing transmission system. The output of wind, solar, and ocean generation resources vary according to the availability of their primary source of fuel which are unpredictable and variable in nature. Such variability creates challenges when operational decisions must be made at times hours in advance of real-time operation. The approach to integrating renewable resources vary among balancing authorities (BA) due to a number of factors, such as the location of intermittent resources in the system (e.g. concentrated resources vs. distributed resources), characteristics of wind (e.g. daily, seasonal and annual patterns), characteristics and flexibility of the conventional generation resources, network topology, system balancing approaches, environmental constraints, and correlation between the system load profiles and wind generation, etc. In addition, variable generation creates additional challenges for BAs that operate in an electricity market environment. This paper analyzes some of the California ISO's (CAISO) market software applications, timelines and the impacts of wind generation. The paper also discusses some of the concerns relating to integrating wind resources information into those software applications, and the impacts that forecasting errors have on the unit commitment, load-following and regulation requirements.