Real-time Energy Market
The IESO's real-time energy market, also known as the physical market, serves as a platform for matching the supply and demand of electricity in Ontario.
Every five minutes, a market clearing price (MCP) is set based on the bids and offers that are settled in the wholesale electricity market. For each five-minute interval, dispatch instructions specify the required amount of energy to be injected into (by sellers) or withdrawn (by buyers) from the IESO-controlled grid based on their accepted offers and bids.
Role of dispatchable generators
Dispatchable generators submit offers to supply electricity in specific quantities and prices for each hour of the day. They are able to adjust the amount of electricity they generate in response to dispatch instructions issued as often as every five minutes by the IESO.
Most resources participating in the real-time market have obligations to submit bids and offers day-ahead. See Day-Ahead Commitment Process.
Role of dispatchable loads
Large energy consumers, also known as loads, can submit bids to purchase electricity. Dispatchable loads are able to adjust their power consumption in response to instructions arriving as often as every five minutes from the IESO. If the Ontario energy price is greater than the price they are willing to pay, the dispatchable load will receive dispatch instructions to reduce their consumption.
Role of importers and exporters
The Ontario electricity market is interconnected with five other jurisdictions: Manitoba, Minnesota, Michigan, New York and Quebec, allowing market participants access to energy throughout eastern North America. Market participants can import energy from another jurisdiction into Ontario, as well as export energy from Ontario. Participants can also move energy through Ontario from one jurisdiction to another in a type of transaction called a linked wheel.
To complete an import transaction, a participant will simultaneously make an offer in the IESO-administered market to import and bid in another jurisdiction to export. An import offer is accepted and scheduled hourly to flow if it is economical in comparison to other supply and it can be physically accommodated by the intertie and the IESO-controlled grid.
In order to export energy, a participant will simultaneously make a bid in the IESO-administered market to purchase energy and offer to import into another jurisdiction. An export will be scheduled hourly if the bid is economical and the intertie and IESO-controlled grid can physically accommodate the transaction.
Role of wholesalers and retailers
Both wholesalers and retailers re-sell electricity. They do not need to have physical facilities that produce or consume electricity to participate in Ontario's real-time and financial markets. Wholesalers buy energy in the wholesale market and sell energy and services to other customers. Retailers sell energy and services to consumers at the retail level.
Producers and consumers of electricity who are not able to respond to five-minute signals in the market are called non-dispatchable.
Non-dispatchable generators are paid the Hourly Ontario Energy Price (HOEP) which is calculated using the average of the 12 five-minute market clearing price (MCP) during the hour. Non-dispatchable loads pay the HOEP.
Non-dispatchable generators submit forecasts of energy production. A non-dispatchable generator is one that typically has little control over its fuel source such as a small hydro generator on a river.
Non-dispatchable loads or consumers draw electricity from the IESO-controlled grid to meet their needs, regardless of the price. A local distribution company is an example of a non-dispatchable load.
Real-time and historical prices: Data Directory (Price)