Market Evolution in Ontario

Transcription

1 Market Evolution in Ontario CanWEA Spring Forum 2018 Calgary, Alberta Adam Butterfield Senior Manager, Electricity Resource Development April 10, 2018

2 Agenda About Ontario s Independent Electricity System Operator (IESO) Wind energy in Ontario Overview of Market Renewal Non-emitting Resources Subcommittee Non-emitting Resource Request for Information 2

3 IESO: Who we are and what we do Reliably operate Ontario s province-wide system 24/7 Enable province-wide energy conservation Enable innovation Administer the wholesale electricity market Plan for Ontario s future energy needs Work closely with communities and stakeholders 3

4 Ontario s Supply Mix Generation Capacity 2017 Transmission-Connected Energy Output *Source: 18-Month Outlook, released March

5 A Changing Sector The challenge for all System Operators is to find ways to operate the grid cost effectively as it becomes increasingly digitized, decentralized, de-carbonized. and much less predictable 5

6 Market Renewal Overview Fundamental redesign of Ontario s electricity markets Demands of a modern grid are rapidly evolving Reforms are required to continue to manage the grid reliably and cost effectively 6

7 Scoping Market Renewal Market Renewal An ENERGY work stream A CAPACITY work stream Single Schedule Market Day Ahead Market Real Time Unit Commitment Incremental Capacity Auction More frequent Intertie Scheduling and other Operability/Flexibility projects also being explored Near-term market enhancements consistent with Market Renewal continue to be pursued 7

8 Non-Emitting Resources Subcommittee Subcommittee of the Market Renewal Working Group To ensure characteristics of non-emitting resources are reflected in Market Renewal and the future market Will develop a report for Q3/ that explores: 1. Participation 2. Market Efficiencies 3. Commercial Mechanisms 8

9 Non-Emitting Resource RFI Will expand the IESO s understanding of: The technical characteristics of existing resources and potential projects The potential barriers to participation different resource types are or may be facing Conducted in two phases over the course of 2018: Phase 1 (submissions due May 4): Input on participation in the current and future electricity markets Phase 2 (to be issued later in 2018): Input on resource development and broader considerations 9

10 NER RFI and Market Renewal The RFI is not part of Market Renewal However, Phase 1 aligned to support the Non-Emitting Resource Sub-Committee (NERSC) Phase 2 will help inform the next steps that follow from the work of the NERSC Input will be used to support Market Renewal and other IESO initiatives NERSC RFI Future Markets 10

11 NERSC, RFI and the Big Picture NERSC Market Renewal Stakeholder Engagements High-Level Designs INTEGRATION Detailed Design Future Evolution RFI Phase 1 RFI Phase

12 IESO Vision for the Future Address uncertainty Create a more flexible marketplace Clearly defined unbundled products and services 12

13 Final Thoughts How can you help? Participate in shaping the future market Potential barriers more detailed input/feedback It s not only about building new facilities broaden service offerings from existing wind farms 13

14 IESO Resources Keep in Touch 14

15 Appendix: Market Renewal work streams 15

16 Single Schedule Market Replace Ontario s two schedule system with a single schedule market that better aligns price with dispatch Reduced complexity unlocks other design changes Improved price signals increase efficiency of dispatch and investments Together, these outcomes will reduce the production cost of electricity 16

17 Day-Ahead Market What is changing? A new market allowing suppliers/consumers to lock into guaranteed prices for supply/consumption a day ahead of when it is required What are the benefits? Efficient way of improving operational certainty for system operators as real-time approaches Improves financial certainty for dispatchable resources Establishes a hedge against price volatility in the realtime market caused by changes in supply and demand 17

18 Enhanced Real-Time Unit Commitment Unit commitment processes provide financial incentives that ensure resources with long lead times to provide energy are available when they are needed Ontario s current real-time commitment process has a number of shortcomings (e.g., does not consider start-up costs, makes commitments based on a one-hour period) The enhanced real-time unit commitment process will include start-up costs and a longer timeframe to make more efficient commitment decisions 18

19 Incremental Capacity Auction Incremental Will secure resources to meet system adequacy needs that are not met by contract or rate regulation Contracted and regulated capacity will not be eligible to participate Capacity Will procure a single uniform capacity product Other products and services will be incentivized via other revenue streams Auction A stable long-term mechanism that will secure capacity in a technology agnostic manner from diverse resource types Fundamental change in risk allocation from contract paradigm 19