Introducing the IESO Renewed Market

To maintain a competitive and efficient wholesale market, the IESO has improved the way electricity is scheduled and priced across the province. These changes ensure 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 and incorporate new technologies.

The renewed market will provide many benefits to customers and the electricity system:

Greater Certainty through a Day-Ahead Market

The introduction of a day-ahead market complements the existing real-time market and provides greater operational and financial certainty for those who supply electricity and those who consume it. By committing supply a day in advance, the system has greater assurance that electricity will be available when it's needed.

A Real-Time Balancing Market

With a day-ahead market in place, the real-time market balances supply and demand based on actual system conditions – accounting for differences between what was committed the day before and how much electricity is used in real-time.

Increased Transparency through Locational Marginal Prices

At the same time, both markets will feature locational marginal pricing (LMP), which accounts for the ability of the transmission system to deliver power from where it is produced to where it is needed. With almost 1,000 local prices throughout the province, congestion in the system becomes more transparent, encouraging new supply to be located where it is needed most.

Most Consumers Continue to Pay Province-Wide Prices

Business customers who pay the wholesale price for electricity through their local hydro company will pay a new price called the Ontario Price which replaces the Hourly Ontario Energy Price. The Ontario Price is based on the Day-Ahead Ontario Zonal Price adjusted based on any differences in the real-time market.

Locational marginal prices in the real-time and day-ahead markets are aggregated to create Ontario Zonal Prices. The Day-Ahead Ontario Zonal Price is the best indication of the cost of electricity for each hour.

What these customers pay for electricity, however, remains the same and will continue to appear as part of the commodity charge on their monthly bills. Residential and small business consumers will continue to pay electricity rates set by the Ontario Energy Board.

Improved Demand Forecasts

More granular weather data and improved modelling will increase the accuracy of the IESO’s forecasts for electricity demand in Ontario. In addition to the provincial forecast, the IESO now produces four regional (or zonal) forecasts to provide a better view of electricity demand in various parts of the system. These improvements will help the IESO more effectively balance supply and demand in both the real-time and day-ahead markets.

Enhanced Market Power Mitigation

The IESO has adopted a streamlined and more transparent approach to managing situations where one or more market participants could use market power to impact prices. Checks are now embedded within existing processes – from registration to settlement – protecting the integrity of the price as it is published and settled. This reduces the need for after-the-fact adjustments and saves time and money.

A New Way of Looking at the IESO Market

A beta version of a Market Data dashboard provides a dynamic overview of market activity – focusing on pricing information as well as the demand and supply data used to determine price. Users can use the new price map to zoom in on various regions of the province to see prices at a local level. Learn more about the data visualizations.

Learn More

To help market participants become more familiar with the renewed market, the IESO has expanded and updated its training offering to reflect the new processes and procedures. Learn more about our in-person workshops, e-Learning modules, workbooks and training guides at Marketplace Training.