The Independent Electricity System Operator (IESO) works at the heart of Ontario’s power system ensuring there is enough power to keep the lights on, today and into the future.
Electricity, just like other commodities, is produced by suppliers and sold and transported to customers. At the centre of this cycle is Ontario’s wholesale electricity market. Through the electricity market, generators and facilities capable of reducing their energy use on short notice, (such as factories and processing plants), bid to provide Ontario’s energy needs.
Markets efficiently coordinate the resources that meet system needs and transparently reflect their costs in prices. As grid operator, the IESO oversees the wholesale electricity market to efficiently manage that supply moment-to-moment within the complexity of the grid.
A New Era for Ontario's Electricity Market: Market Renewal Explained
The IESO's Role in Ontario's Electricity Markets
The IESO oversees and evolves Ontario's electricity markets, driving competition to maintain affordability. The IESO:
Reviews and accepts offers from electricity suppliers, starting with the lowest-cost options, until Ontario's energy needs are met
Sets and enforces rules that govern participation in Ontario's electricity markets
Fosters an open, dynamic and sustainable marketplace that encourages new opportunities for emerging resources
The Value of Electricity Markets
In Ontario, electricity is produced by suppliers and sold to distributors (local hydro companies) through the wholesale electricity market. This competitive process:
Improves the reliability and operability of Ontario's electricity system
Signals economic opportunities for electricity suppliers
To maintain a competitive and efficient wholesale market, the IESO, in 2025, improved the way electricity is scheduled and priced across the province. These changes are ensuring we can continue to make the most cost-effective use of our supply every hour of every day as the grid expands to meet growing demand. They are also enhancing the province’s electricity market to adapt to sector change.
New features of the wholesale market include:
Improvements to the way the price of electricity is determined to make it more efficient and reduce overall costs. These savings will be spread out across all consumers over the coming years.
Committing supply a day in advance through a day-ahead market, so the system has greater assurance that electricity will be available when it's needed.
More granular weather data and improved modelling, allowing the IESO to increase the accuracy of its forecasts for electricity demand in Ontario and providing four regional forecasts.
