Creating the Electricity Market of Tomorrow

Then and now

Designed in the late 1990s, Ontario’s wholesale electricity markets opened in 2002, when the electricity landscape looked very different from today. The elimination of coal-fired units, the integration of renewable energy, the increase in small-scale, local generation and the emergence of new technologies like energy storage have dramatically – and permanently – changed the dynamics of Ontario’s electricity system.

Changes required

As the sector changed, it became apparent the market needed to evolve. Over the years, the IESO and its stakeholders have worked to make important improvements to different elements of the market’s design. However, more foundational changes are required to enable the IESO to manage today’s grid while preparing for tomorrow.

What is the Market Renewal Program?

The Market Renewal Program is an ambitious, coordinated set of initiatives that will result in a fundamental redesign of Ontario’s electricity markets. When fully implemented, it will result in a more efficient, stable marketplace with competitive and transparent tools that meet system and stakeholder needs at the lowest cost. It will also help prepare Ontario for the future by creating an improved framework for incorporating new and emerging technologies.

Specifically, market renewal is focused on improving how:

  • Electricity is scheduled and dispatched to help reduce overall system costs.
  • Ontario acquires electricity resources to meet medium- and long-term needs which will help ensure that reliability needs are met at the lowest cost.
  • The system can reliably and efficiently respond to unexpected, short-term changes in supply and demand.

Creating the Electricity Marketplace of Tomorrow highlights how the IESO and stakeholders are working together to ensure that the marketplace better serves customers and market participants.

To prepare for the electricity sector of tomorrow, the IESO is working with stakeholders to pursue fundamental and enduring changes to Ontario’s electricity market.

Market renewal benefits

The estimated benefits of the Market Renewal Program significantly outweigh estimated implementation costs, with net benefits expected to reach approximately $3.4 billion in savings over a 10-year period or an annual average of $340 million. Cost savings will be achieved, structural changes to market design, greater market competition and a more flexible procurement process that is better aligned with system needs.

 

Stakeholder involvement critical

The IESO cannot make these changes alone. Since the spring of 2016, stakeholders and the IESO have been working together to lay the foundation of this redesigned market which is expected to result in lower costs for consumers and new opportunities for those that operate in the market.

Though work on the market renewal elements has been underway for some time, stakeholders are always welcome to participate in the design and decision-making process. For more information about becoming involved, please contact engagement@ieso.ca.