Participating in Ontario's Electricity Market
The IESO administers a series of markets and programs that together comprise the province's wholesale electricity marketplace. While the Real-Time Energy Market serves as the backbone of system operations, there are a number of other venues for participants to interact with the IESO and provide important services that support the efficient management of the grid.
Real-Time Energy Market
The IESO's real-time energy market, also known as the physical market, acts as a platform for matching the supply and demand of electricity.
Every five minutes, a market clearing price (MCP) is set based on the bids and offers that are settled in the whole electricity market. At each five-minute interval, a set of dispatch instructions specifies the required amount of energy to be either injected (by sellers) or withdrawn (by buyers) based on their accepted offers and bids.
Importers and exporters of electricity can sell and buy power into and out of Ontario. They are issued dispatch instructions on an hourly basis.
Day-Ahead Commitment Process
The day-ahead commitment process (DACP) helps address reliability concerns through the advanced scheduling and commitment of resources required to meet the next day's expected level of demand. All generators and dispatchable loads that participate in the real-time market have the ability to submit dispatch data or schedules under the day ahead-commitment process.
Operating Reserve Market
The IESO administers an Operating Reserve (OR) market, which ensures that there is additional supply availability should there be an unanticipated loss of generation or increase in demand in the real-time energy market. The IESO can then call on spare energy capacity, which is offered into the OR market by dispatchable generators, traders or dispatchable loads that are able to quickly respond to dispatch instructions from the IESO.
Demand Response Auction
Demand response creates new resources from infrastructure that is already being used for other purposes. The IESO's annual Demand Response (DR) Auction provides a transparent and cost-effective way to select the most competitive providers of DR, while ensuring that all providers are held to the same performance obligations.
Financial markets deal solely with the financial risk of trading electricity and do not affect the actual delivery and use of electricity. The transmission rights market is the only financial market.
Physical Bilateral Contracts
A physical bilateral contract is an optional arrangement available to energy buyers and sellers. Any authorized market participant can use physical bilateral contracts. In Ontario's IESO‐administered markets, physical bilateral contracts are not part of the scheduling and dispatch process − they are involved only in settlements.
Ancillary Services Market
The ancillary services market enables the IESO to ensure the reliability of Ontario's power system. This market consists of contracts for ancillary services such as frequency control, regulation service, voltage control and reactive power, as well as reliability must-run contracts.
Learn more about Ontario's wholesale electricity markets
Learn what is required to become
a participant in Ontario's electricity markets
Learn how to get involved in changes affecting Ontario's electricity markets