Market Renewal

The Real-Time Generator Cost Guarantee (RT-GCG) program ensures that generators with long start-up times are available to meet reliability, if needed, in real-time. It has evolved over the years in terms of its eligibility criteria and the cost recovery framework and methodology.  However, there remain a number of systemic issues with the design of the current program.

• Inefficiency: Resources under the program are committed solely on the basis of their energy offers; start-up, speed no load and other costs are not included in this calculation and are recovered under the pre-approved cost recovery framework. 

• Lack of Competition: The lack of consideration of start-up costs means generators in the program do not have to compete on those costs to get a commitment.

• Misalignment with Day-Ahead: The day-ahead and intra-day commitment programs use different optimization both in terms of the inputs considered and the optimization timeframe (day-ahead commitments are based on three-part offers and 24 hour optimization where RT-GCG commitments are based on energy offers only and each hour is optimized independently). 

• Administration and Oversight: Historically, cost submissions have been subject to review and audit creating a high administrative burden for both the IESO and market participants. 

The design of the RT-GCG program has also been criticized in several Market Surveillance Panel reports due to its inefficiency, cost and lack of transparency.

Under Market Renewal the current commitment program will be enhanced to one that facilitates greater competition and more efficiently commits resources anticipated to be needed for reliability in real-time.  This will be achieved by:

• Allowing participants to competitively submit offers reflecting incremental energy, start-up and speed-no-load costs respectively

• Including all costs associated with offers in the IESO’s optimization tools
• Making commitment decisions based on the total efficiency of all hours across the commitment period

Enhanced Real-Time Unit Commitment, together with a Day-Ahead Market and a Single Schedule Market collectively will improve the dispatch, commitment and pricing of resources in the energy market.