applied to operating reserves. The rule will affect those ISOs that have not already adopted these practices (ISO-NE, MISO and PJM).

Figure 18. Monthly trading volumes on the German intraday market, 2012-16

Note: TWh = terawatt hour.

Source: 50Hertz Transmission GmbH (2017), “The transmission perspective”.

Germany has systematically developed its intraday market to facilitate trading closer to real time.

Cross-regional trade of electricity

Benefits of regional power system integration

The benefits of regional (or cross-border) power system integration have been discussed in a number of previous International Energy Agency (IEA) studies (see, for example, IEA, 2014b; IEA, 2015a; and IEA, 2016b). These benefits cut across all aspects of the power sector, including: improved security of supply; improved system efficiency; and improved integration of variable renewable resources. Many of the earliest efforts to link power systems were driven by a desire to improve the development and use of resources across larger balancing areas. For example, Norway and Sweden integrated their power systems so that Sweden could take advantage of Norway’s low-cost hydroelectric power, and Norway could balance its hydroelectric resources with Sweden’s thermal generation.

Many of the benefits of regional integration derive from the increased optimisation of generator dispatch. For example, the western portion of the United States has a regional realtime power market called the Western Energy Imbalance Market (EIM), which started operations in 2014.31 According to the most recent estimate of system benefits,32 total (gross) cost savings between November 2014 and September 2018 amount to USD 502 million (United States dollars). This statistic, however, is only part of the story. Membership in the EIM has expanded rapidly, from only two participants in 2014 to eight today (and more expected to join in the next few years). Of the total benefits, USD 214 million (or nearly 43% of the total) accrued in the first three quarters of 2018.

31The organisation and operational structure of the Western EIM is discussed in more detail below.

32www.westerneim.com/Pages/About/QuarterlyBenefits.aspx.

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