Operating Reserve Markets

Operating reserve (OR) is stand-by power or demand reduction that can be called on with short notice to deal with an unexpected mismatch between generation and load. Through the administration of operating reserve markets, the IESO ensures that additional supplies of energy are available should an unanticipated event take place in the real-time energy market.

The three types of operating reserve classes that can be offered by dispatchable generators and dispatchable loads are:

  • 10-minute synchronized (spinning) reserve
  • 10-minute non-synchronized (non-spinning) reserve
  • 30-minute reserve (non-synchronized)

To offer operating reserve, dispatchable generators or loads must be able to provide the energy within the time frame specified by the class of operating reserve involved (either 10 minutes or 30 minutes) and be able to sustain supplying operating reserve energy for up to one hour. To offer in the operating reserve markets, participants must also offer equal or greater amounts of energy into the real-time market. The scheduling of operating reserve and energy in the real-time energy markets are co-optimized to ensure the most efficient outcome for the market.

Dispatchable participants may offer into one or all three classes of operating reserve. Even if the their offer is selected but not activated, they will receive stand-by payments for all megawatts for which they were selected, without having to make changes to their production schedule.

A price for this reserve energy is determined every five minutes based on offers in the market. All accepted offers are paid the market clearing price for that class. When the operating reserve is activated, the suppliers are paid for the energy provided.

Operating reserve requirements must adhere to reliability standards established by the North American Electric Reliability Council (NERC) and Northeast Power Coordinating Council (NPCC) — namely, the largest single unexpected event (contingency) plus half of the second largest contingency that could occur. Typically, this means the loss of Ontario's one and a half largest generators.


Related Information

Training: Guide to Operating Reserve

Market Rules: Chapter 7, System Operations and Physical Markets

Daily and Historical Operating Reserve Prices: Data Directory (Price)