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Market Renewal Newsletter - October Update

October 6, 2022

Every issue we feature an update from someone different on the Market Renewal team to shed light into their work.

From the desk of...

Joseph Rampersad, Quality Assurance Lead, Market Renewal Program (MRP)

The Market Renewal Program (MRP) will be integrating foundational changes across more than 10 legacy systems that work together to dispatch and settle the wholesale electricity market. The high degree of integration across these legacy systems requires extensive quality assurance (QA) testing to ensure all the pieces work together.

QA is an important function during the software development process, enabling teams to effectively plan and execute testing activities to identify and prevent defects. I’m part of the MRP QA team who works closely alongside our software vendors to ensure they’re delivering as good of a product as possible.

Currently, work is underway on the development of the dispatch scheduling and optimization engine, which is at the heart of the IT ecosystem. Myself along with a group of IESO subject matter experts and representatives from QA and IT teams are participating in the first of three phases of testing, factory acceptance testing. We’re now observing and supplementing tests performed by the vendor, and will soon be performing our own exploratory testing to expand upon what may not have been in scope of the vendor’s tests. Think of it like test driving a car at the factory before it makes its way to the dealership. This work is crucial because it’s easier to pinpoint and fix defects at this earlier stage of work. The next stage after this work is further testing when the software is deployed to IESO’s test environments and integrated with other systems so we can see how all of the systems interact.

We’re still in the early stages of all of this crucial testing work, but I’m pleased to see progress and enjoy being on the ground floor to see these IT solutions take shape.

What we're working on

MRP Implementation Engagement

Revised MRP schedule and budget

At the September engagement day session, an update on the MRP schedule indicated the projected MRP in-service date of November 2023 is no longer feasible. Integrating the foundational changes across the systems that dispatch and settle the wholesale electricity market requires more time for solution development and testing than anticipated. The project is at a stage where the information necessary to more accurately build the schedule is available, including the detailed system requirements and the associated vendor validated solution development times. This allowed IESO to complete a thorough review of the schedule and resulted in a revised in-service date of May 2025, and a forecast budget of $233 million. The scope of the project has not changed, and a review of the MRP business case shows the renewed market will deliver at least $700 million in net financial benefits to Ontario consumers over the first 10 years of operation.

See the September presentation deck or view the recording.

Interim Alignment Batch

In September, the Interim Alignment batch of market rules and market manuals was posted providing conforming changes to build on three concepts introduced in prior MRP batches:

  1. Resource as a defined term
  2. Interim electricity storage facilities within MRP
  3. Price Responsive Load (PRL) as a distinct load resource type

Stakeholders can review the market rules and manuals and use the feedback form to submit comments to engagement@ieso.ca by November 8. An overview of the batch of materials was presented at the September 22 engagement discussion. View the recording.

IESO news

Q3 2022 Reliability Outlook Now Available

Ontario’s power system continues to be well positioned for reliability, with sufficient electricity expected to be available to meet the needs of residents, businesses and communities for the next 18 months. However, tight electricity supply conditions are emerging and will require active outage management and increased import volumes at specific times.

Total consumption in 2022 is expected to reach 136.0 terawatt-hours (TWh), an increase of 1.7% over 2021. The demand forecast continues to evolve in response to inflation, supply chain disruptions and geopolitical tensions, among other factors. The IESO is monitoring the situation and will adjust the forecast as needed.

Ontario has entered a period during which generation and transmission outages will be increasingly difficult to accommodate. The IESO expects these conditions to persist for the foreseeable future. As a result, market participants are strongly encouraged to plan ahead, submit outage requests early and coordinate with us to ensure planned outages can be appropriately scheduled.

Electricity demand growth in the province is expected to slow to 0.3% in 2023 after strong growth in each of the previous two years (1.4% in 2021 and a projected 2.1% in 2022). As is the case in other parts of the world, Ontario’s economic activity has declined in response to a number of external forces, including the pandemic, geopolitical tensions, supply chain disruptions, rising inflation, and other factors. Although economic growth is slowing in the near term, Ontario’s long-term demand forecast shows strong growth due to electrification and new development in the mining, agricultural and industrial sectors.

Ontario’s transmission system is expected to reliably supply province-wide demand for the next 18 months. However, there are a significant number of major generation and transmission projects currently underway or starting soon.

The full report is available on the IESO website.

Capacity Auction Now Open to Generator-Backed Imports

Starting this year, the Capacity Auction is expanding to allow generator-backed imports from neighbouring jurisdictions.

The auction can now accommodate up to 500 megawatts (MW) of capacity imports for the Summer 2023 and Winter 2023/24 commitment periods. In future auction years, this maximum could increase to 1,500 MW. This enhancement to the Capacity Auction will increase competition and drive down costs.

The pre-auction report for the 2022 Capacity Auction is now available through the IESO reports site. The enrollment window is also now open, and participants can submit their enrollment information through the Online IESO platform.

Organizations interested in participating in the auction are encouraged to review the recently updated training guide and timelines document. For more information about the auction, please visit the Capacity Auction web page.

Reminders

Key dates

  • October 11: Technical Panel Meeting
  • December 1: Settlement batch posting
  • December 14-16: Stakeholder engagement days

Did you know?

This MRP Consolidated Draft version of the market rules contains all of the market rule amendments that the IESO has received provisional approval for from the Board of Directors. The corresponding market manuals contain all supporting market manual changes following the completion of stakeholder review.

The IESO will update the MRP Consolidated Draft periodically in an effort to represent the most current provisionally approved draft market rules and manuals.

Only the market rule chapters and market manuals that have been amended by the Market Renewal Program are contained in the MRP Consolidated Draft. Each market rule chapter and market manual includes all the changes proposed across the market renewal amendments.

The draft market rules and market manuals are provided for reference purposes only, and are intended to assist market participants in their review of the evolving set of proposed market rule and manual amendments related to MRP.

View the MRP Consolidated Draft.

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