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With the recent emphasis on environmental issues and concerns for global warming, many states have adopted aggressive Renewable Portfolio Standards (RPS) requiring electricity suppliers to obtain a minimum percentage of their power from renewable energy resources by a given date. Among various states, California leads with an RPS of 20% by 2010, and 33% by 2020. Most renewable resources, by their nature, fall into the category of variable resources characterized by their variability and uncertainty. NERC defines "variability" as the output of the resource changing by the availability of the primary fuel (wind, sunlight...) resulting in fluctuations in plant output, and 'uncertainty" as the magnitude and the timing of the output being less predictable than those for conventional generation. Aside from the many benefits that can be gained from the increasing penetration levels of variable resources, the task of controlling the power system and balancing supply and demand becomes more of a challenge for balancing area operators. In addition to the inherent variability and unpredictability associated with these resources, the fast ramping associated with wind and solar photo voltaic resources will further challenge the balancing area operators. The task of balancing and controlling the power system is further complicated by the fact that, in current practice, in most balancing areas, renewable resources are treated as "must take" resources, requiring the balancing area operators to look for additional fast responding resources to compensate for the variability, uncertainty, and the fast ramping of variable resources. In order to accommodate the increasing penetration levels of variable resources, balancing areas will need to adopt strategies and implement new tools to provide better visibility into variable resource operations, to better forecast their expected generation levels on a short term basis, and to dispatch and control these resources. The operator of these r- - esources, on the other hand, will require tools to interface with the balancing area operators, and to facilitate and automate the participation of variable resources in various energy and ancillary services markets. In this presentation, we will first provide examples, using field data, of the impacts of variables resources on Area Control Error and will discuss the results of various research, and their recommendation, by various organizations on the integration of variable resources. We will then address the additional capabilities required in a balancing area control center to better forecast, dispatch, and control variable resources. We will also address the tools and capabilities required for the renewable resource operators to interface with balancing area operators and for their participations in various energy and ancillary services markets.