Creating the Electricity Market of Tomorrow

Then and now

Designed in the late 1990’s, Ontario’s wholesale electricity market opened in 2002 at time when the electricity landscape looked very different from today. The elimination of coal-fired units, the integration of renewable energy, the increase in small-scale, local generation and the emergence of new technologies like energy storage have dramatically – and permanently – changed the dynamics of Ontario’s electricity system.

Changes required

As the sector changed, it became apparent the market needed to evolve. Over the years, the IESO and its stakeholders have worked to make incremental improvements to different elements of the market’s design. However, more foundational changes are required to enable the IESO to manage today’s grid while preparing for tomorrow.

Ontario is now in a stable supply situation that is expected to continue into the 2020s, making this an opportune time to identify and explore much needed market design changes. Once fully implemented, these enhancements will yield significant benefits.

What is Market Renewal?

Market Renewal is an ambitious, coordinated set of initiatives that will result in a fundamental redesign of Ontario’s electricity markets. When fully implemented, it will result in a more efficient, stable marketplace with competitive and transparent tools that meet system and stakeholder needs at the lowest cost. It will also help prepare Ontario for the future by creating an improved framework for incorporating new and emerging technologies.

Specifically, Market Renewal will:

  • Improve the way Ontario acquires supply to meet medium- and long-term needs;
  • Enable the IESO to more cost-effectively schedule and dispatch electricity to meet demand as it changes from hour-to-hour and minute-to-minute; and
  • Increase flexibility, enabling the IESO to more efficiently manage unexpected short-term changes on the system, like those that can be caused by variable generation such as wind and solar.

Creating the Electricity Marketplace of Tomorrow highlights how the IESO and stakeholders are working together to ensure that the marketplace better serves customers and market participants.

To prepare for the electricity sector of tomorrow, the IESO is working with stakeholders to pursue fundamental and enduring changes to Ontario’s electricity market.

Market Renewal benefits

The estimated benefits of Market Renewal significantly outweigh estimated implementation costs, with net benefits expected to reach approximately $3.4 billion from 2021-2030.? Cost savings will be achieved through better use of existing assets, greater market competition and a more flexible procurement process that is better aligned with system needs.

Stakeholder involvement critical

The IESO cannot make these changes alone. Since the spring of 2016, stakeholders and the IESO have been working together to lay the foundation of this redesigned? market which is expected to result in lower costs for consumers and new opportunities for those that operate in the market.

Though work on the market renewal elements has been underway for some time, stakeholders are always most welcome to participate in the design and decision-making process. For more information about becoming involved, please contact engagement@W88