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Markets and Programs

Participants in Ontario’s wholesale electricity market reflect a wide range of businesses and interests in the energy sector. Recognizing these different needs, the market offers a variety of programs that allow for a diverse and strong participant base.

Real-time Energy Market
The IESO operates a real-time energy market in which electricity demand and supply are balanced and instructions are issued to dispatchable generators and loads every five minutes. For each five-minute interval, the IESO collects the best offers from generators and loads to provide the required amount of electricity and publishes the market clearing price.

Operating Reserve Market
Generators, large energy consumers and traders can offer into the operating reserve (OR) markets and receive payment for providing energy on call, if extra supply is needed in the real-time market. Prices in the OR market are set every five minutes.

Transmission Rights Auction
This market offers a means to mitigate the price risk associated with congestion on an intertie. Congestion on an intertie can lead to a price difference between the intertie zone clearing price and the Ontario market clearing price. Transmission rights are not a guarantee of physical transmission of energy.

Day-Ahead Commitment Process (DACP)
The DACP improves the efficiency of the electricity market through the advanced scheduling and commitment of resources required to provide electricity on a daily basis, and by optimizing existing and anticipated generation more effectively, while ensuring reliability.

Dispatchable Load
A key addition to the market is the increasing role of demand response. Large volume consumers can participate in the market, by either indicating how much electricity they plan to consume at what price or even offering Operating Reserve in the market. Currently, there are 13 facilities operating as dispatchable load in the market, offering a potential 700 MW of demand response.

Spare Generation On-line Program
Given that large fossil-based generators typically require long and costly start-up processes, they are often unavailable to meet the supply gap that occurs when there is a sudden increase in Ontario demand or decreases in supply. To address this issue, the IESO introduced the Spare Generation On-line (SGOL) program, which offers generators a guarantee of start-up and minimum costs (for a specified minimum run-time) to encourage generators to start-up their facilities earlier in the day, even when market prices are lower than their operating costs.

Ancillary Services Contracts
In order to ensure the reliable operation of the IESO-controlled grid, the IESO contracts for a number of services that cannot be provided through the market. These include regulation service, black-start capability, reactive support and voltage control and, if needed, reliability must-run contracts.


 
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