DER Potential Study

Distributed Energy Resources (DERs) have emerged as a major trend impacting the electricity grid and wholesale electricity markets. The IESO understands that effectively enabling DERs will provide significant benefits to the electricity grid, to consumers, and to the environment. The IESO is thus seeking to gain a better understanding of DERs, including their ability deliver system services, their cost effectiveness, and the most appropriate pathways to enable their uptake.

To help inform our path forward in enabling DERs, the IESO has commissioned a DER Potential Study. The primary objectives of the study are to determine the types and volumes of DERs that exist and can be expected to emerge in Ontario over a 10-year timeframe (from 2023-2032), as well as identify the potential for these resources to provide wholesale electricity services. The study will include:

• A description and identification of promising DER technologies relevant to the Study’s ten-year time-horizon.
• Identification of a subset of those DER technologies that are most relevant for the Ontario context, to then be modelled quantitatively in the study.
• A technical potential assessment of these DERs.
• An economic potential assessment of these DERs, based on an advanced benefit-cost analysis, under three scenarios.
• An achievable potential assessment of these DERs, under three scenarios.
• A discussion of the findings and implications of the potential assessment, and recommendations for the IESO on focus areas and timing for DER integration into the wholesale market or alternative options to enable DER participation.

At the conclusion of the study, the IESO intends to have a sense of the volume of DERs and a quantification of their potential contributions to each of energy, capacity, operating reserve and regulation service, as well as their associated carbon emissions reductions. The findings of the DER Potential study will be a key input into the IESO’s DER market enhancement efforts which will begin in October, 2021 as part of the DER Roadmap. 

The IESO intends to use the results of the study for the following purposes:

• To establish the case for DER integration in IESO’s wholesale markets where DERs prove cost-effective and / or where participation in wholesale markets would be likely to occur.
• To inform wholesale market design priorities to capture services from and eliminate barriers for DERs that are cost-effective and / or likely to participate in wholesale markets.
• To identify circumstances where DERs prove cost-effective and / or where adoption would likely occur, but where wholesale market integration / participation may be less likely, and in such cases, identify potential alternative opportunities for capturing value from these DERs.
• To provide estimates of resource potential and costs that can be used to inform / illustrate resource choices in bulk system and regional planning (as an alternative to large supply-side investments or wires).
• To identify and quantify cost-effective carbon emissions reductions opportunities, including from the DER capabilities inherent in targeted fuel switching towards electricity.

The IESO encourages all interested parties to participate in this engagement. The IESO anticipates that this initiative will be of particular interest to current and prospective market participants, resource developers, DER technology and service providers, municipalities and Local Distribution Companies (LDCs). To be added to the email list for communications related to this engagement or to submit comments and enquiries, please email engagement@ieso.ca.

Related Information

Draft Engagement Plan

Related Engagements

Distributed Energy Resources (DER) Roadmap

Capacity Auction

Demand Response Working Group (DRWG)

Distributed Energy Resources Survey

Enabling Resources Program

Expanding Participation in Operating Reserve and Energy (EPOR-E)

Hybrid Integration Project

IESO York Region Non Wires Alternatives Demonstration Project

Innovation and Sector Evolution White Paper Series

Resource Adequacy

Schedule of Activities

Anticipated timing for this engagement is presented below.