Market Renewal - Day-Ahead Market
Soon after the market opened in 2002, the IESO began discussions with stakeholders on the development of a financially-binding day-ahead market. The Day-Ahead Market project did not proceed for a number of reasons but a key challenge was the complexities of settlement and operation under the existing two-schedule system for pricing and dispatch.
The IESO launched a day-ahead commitment process (DACP) in 2006, which commits certain dispatchable generators and the economic scheduling of imports in the day‐ahead time frame, in return for a financial guarantee. A number of further enhancements were made to the day-ahead commitment process in 2011, including improved optimization and allowing committable generators to submit their start-up and operations costs along with their energy offers.
While many improvements have been made to the commitment process, the absence of a day ahead financial commitment for all resources limits the extent to which participants will fully and efficiently participate.
The replacement of the existing Enhanced Day-Ahead Commitment Process with a financially-binding Day-Ahead Market (DAM) can provide significant improvements and benefits:
- dispatchable resources have improved production certainty
- the system operator has improved operational certainty as real-time approaches, and
- consumers benefit from more efficient and cost-effective decisions overall.
The transition to a DAM is enabled significantly by the move to a single schedule electricity market under Market Renewal.