Market Renewal - Incremental Capacity Auction
The province currently meets its capacity needs through a combination of regulated and contracted resources. This approach has been instrumental in transitioning to a cleaner supply mix while ensuring reliability over the years. Looking ahead, we have an opportunity to draw on the experiences of other electricity markets to meet our reliability needs more cost effectively.
Capacity auctions have been implemented by many jurisdictions with much success. Capacity auctions can achieve efficiency benefits by creating a competitive market for suppliers, increasing the system’s ability to adjust to changing supply and demand dynamics, and attracting low-cost, non-traditional capacity resources that are unlikely to be identified in the absence of a competitive auction. For suppliers, capacity auctions provide enduring and transparent mechanisms to get paid for capacity they can supply. For consumers, capacity auctions ensure that capacity is secured at lowest cost.