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Operating Reserve

Ontario’s IESO manages an operating reserve (OR) market, which is essential to maintaining the reliability of Ontario’s electricity system by ensuring that there is always enough supply to meet the demand for electricity.

OR is stand-by capacity that is kept online in case the power system suffers a severe strain and reserve power is required.

The IESO created an OR market to efficiently purchase OR from market participants and subsequently activate it, when needed, to quickly restore the balance between supply and demand.

Market participants can offer OR to the IESO-administered markets at the same time that they bid or offer energy (to offer operating reserve, there must be an energy bid or offer of at least as many megawatts). The IESO determines the price for this reserve every five minutes, based on the offers in the market.

Operating Reserve and Reliability
When the IESO determines operating reserve requirements, it must adhere to reliability standards established by authorities such as the North American Electric Reliability Council (NERC) and the Northeast Power Coordinating Council (NPCC). Operating reserve requirements are based on the largest single unexpected event (contingency) plus half of the second largest contingency that could occur under a given IESO-controlled grid operating configuration. Typically, this means the loss of the two largest generators. The IESO usually schedules between 1,380 and 1,580 megawatts of OR at any given time (this is the sum of the ten-minute and thirty-minute requirements).

Types of Operating Reserve
The IESO administers markets for three classes of OR: 10-minute spinning, 10-minute non-spinning and 30-minute OR. 10-minute spinning and non-spinning OR must be provided by resources whose energy can be made available within 10 minutes of the contingency to restore the balance between supply and demand. 10-minute spinning OR, which is normally 25% of all 10-minute OR in the market, can only be offered by generators that are actually synchronized to the power grid. Finally, 30-minute OR can be offered by spinning or non-spinning resources that are available to provide energy within 30 minutes of activation.

Participating in the Operating Reserve Market
To participate in the operating reserve market, participants need to be dispatchable market participants. Dispatchable participants are generators or loads that are be able to adjust the amount of their energy in response to ‘dispatch instructions’ from the IESO.

By becoming a dispatchable participant, you can offer operating reserve into the market and receive an additional revenue stream. It should be noted that only dispatchable generators can participate in the 10-minute spinning or 30 minute OR markets. Depending on how often your offer is selected and the current market clearing price, this revenue can be considerable. The IESO has compiled historical daily operating reserve prices since May 1, 2002 for your analysis.

If you are not a market participant and have the capability to becoming a dispatchable facility by offering standby resources, and would like to learn more, contact IESO Customer Relations at:

E-mail: customer.relations@ieso.ca
Telephone: 905-403-6900
Toll Free: 1-888-448-7777
 
Customer Relations | e-mail: Customer.Relations@ieso.ca | Telephone: 905-403-6900 | Toll-free: 1-888-448-7777 | Fax: 905-403-6921
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