Enhanced Day-Ahead Commitment Process (EDAC)

Information from market participants is one source used by the IESO to create an accurate, dependable view of the next day's supply and demand situation, which serves as the basis for economically sound scheduling and commitment decisions.

In 2007, the IESO initiated a study to assess how the company's day-ahead scheduling mechanisms might be upgraded to support the anticipated changes in Ontario's electricity sector. This assessment addressed both current and future challenges.

The merits of various possible day-ahead mechanisms were studied and assessed through the Stakeholder Engagement Plan 21 (SE-21). The results of the analysis, described in the IESO "Day-Ahead Market Evolution Preliminary Assessment," published on May 5, 2008, identified an Enhanced Day-Ahead Commitment (EDAC) Process with an Energy Forward Market (EFM) as the most prudent choice for implementation. Design of an EFM is not proceeding as part of the EDAC project at this time, but the IESO is continuing to explore EFM alternatives.

On September 5, 2008 the IESO Board approved the implementation of the EDAC common elements, guarantees, and export inclusion. The common elements of the various day-ahead options include:

• Optimization of unit commitment over the entire 24 hours of the next day instead of considering each hour in isolation;
• Use of multiple passes of the constrained algorithm to determine resource scheduling and commitment; and
• Three-part bidding including price, quantity and fixed costs.

 
The Enhanced Day-Ahead Commitment (EDAC) project will deliver changes to the Day-Ahead Commitment Process. It is designed to enhance the efficiency of the electricity market through the advanced scheduling and commitment of resources required to provide electricity on a daily basis. Implementation will deliver benefits to the market in the following areas:

• The three-part offer and 24-hour optimization process will minimize the cost of generation and reduce uplift charges through improved efficiency in unit commitment;
• Accurate unit commitment will allow gas-fired generators to react appropriately, purchasing gas supply in an effective manner and operating more consistently;
• The impact on consumer bills is expected to be negligible, with the possibly of a slight reduction; and
• The reliability of the Ontario system will be maintained, but electricity will be delivered more efficiently.

The EDAC project is underway and is expected to be fully operational by the third quarter of 2011. The timeline below indicates the various stages of the project, with completed stages indicated by a light blue arrow.