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Capacity Auction Continues to Provide Valuable Flexibility

December 9, 2021

Building on the success of previous capacity auctions, the IESO has once again secured capacity from a diverse range of resources in its most recent auction. Through this competitive mechanism, 1,286.7 megawatts (MW) cleared for the 2022 summer obligation period, with another 841.9 MW cleared for the winter of 2022-2023.

Capacity auctions are one of the key elements of the Resource Adequacy Framework, enabling the IESO to respond to changing system needs efficiently and transparently. By relying on procurements with short-term commitments to address needs that fluctuate from year to year, the auction can ensure needs are met in the most flexible and cost-effective manner, without locking into longer term commitments.

There was a high degree of interest and competition among potential capacity providers, with 43 organizations enrolled. Resources that cleared the auction include industrial and commercial consumers providing demand response, imports, generation and energy storage. The auction resulted in clearing prices of $264.99/MW-day for summer and $60.00/MW-day for winter.

As was the case in the 2020 auction, the majority of successful participants this year were medium-sized and large industrial and commercial consumers that were capable of reducing their demand for electricity as required. In addition to creating a new revenue stream for local businesses, the auction also enables participants to contribute to the reliability, affordability and sustainability of Ontario’s power system.

Working with stakeholders to evolve and grow the Capacity Auction will continue to be a high priority. For example, the IESO introduced a minimum target threshold that was applied for the winter 2022-2023 obligation period, as noted in the 2021 Annual Acquisition Report. Going forward, making additional refinements will increase business and investment certainty in the role of the auction, while also supporting competitive and cost-effective outcomes for Ontario ratepayers. Some of the improvements planned for the 2022 auction include enabling additional types of import resources to participate, and introducing a capacity qualification process and enhanced performance assessment framework.

The full list of this year’s successful participants is as follows:

Capacity Auction Participants with a Summer Obligation

Capacity Auction Participants

Resource Type

Total Capacity

AIR LIQUIDE CANADA INC.

Dispatchable Load

30

ALGOMA STEEL INC.

Physical HDR

40

ARAUCO CANADA LIMITED

Physical HDR

10

AV TERRACE BAY INC.

Physical HDR

8

AYPA POWER CANADA LP

Virtual HDR

29.7

BIOVELD CANADA INC.

Dispatchable Load

20

BRUCE POWER INC.

Dispatchable Load

3.3

DEMAND POWER GROUP INC.

Virtual HDR

1.6

EDGECOM ENERGY INC.

Virtual HDR

35.9

ENEL X CANADA LTD.

Virtual HDR

201.5

EN-POWERED INC.

Virtual HDR

11

ESSEX ENERGY CORPORATION

Generation

2

Virtual HDR

1

GC PROJECT LP

Virtual HDR

17.1

GERDAU AMERISTEEL CORPORATION

Dispatchable Load

72

GERDAU AMERISTEEL CORPORATION -CAMBRIDGE

Physical HDR

2.3

GOLDCORP CANADA LTD.

Physical HDR

6

GREAT CIRCLE POWER CORPORATION

Virtual HDR

19

GREAT LAKES COPPER LTD

Dispatchable Load

2.9

HCE ENERGY INC.

Virtual HDR

2

HQ ENERGY MARKETING INC.

System-Backed

150

ICE RIVER SPRINGS WATER CO. INC.

Dispatchable Load

1.1

IROQUOIS FALLS POWER CORP.

Generation

103

IVACO ROLLING MILLS 2004 L.P.

Dispatchable Load

25

KINGSTON COGEN LIMITED PARTNERSHIP

Generation

101

LEHIGH HANSON MATERIALS LIMITED

Physical HDR

18

NEW GOLD INC.

Physical HDR

25

ONTARIO POWER GENERATION INC.

Virtual HDR

3.8

POWIN ENERGY ONTARIO STORAGE II, LP

Storage

6

RENERGY TECHNOLOGIES INC

Virtual HDR

1.1

RODAN ENERGY SOLUTIONS INC

Virtual HDR

244.6

SAULT STE MARIE ENERGY STORAGE LP

Storage

1.7

SOBEYS CAPITAL INCORPORATED

Virtual HDR

1.4

STEM ENERGY CANADA INC.

Virtual HDR

2.6

UNIVERSITY OF GUELPH

Virtual HDR

2.6

VOLTUS ENERGY CANADA LTD

Virtual HDR

78.1

WEYERHAEUSER COMPANY LIMITED

Physical HDR

6.4

TOTAL

 

1286.7

Capacity Auction Participants with a Winter Obligation

Capacity Auction Participants

Resource Type

Total Capacity

AIR LIQUIDE CANADA INC.

Dispatchable Load

10

AMHIL ENTERPRISES

Dispatchable Load

1

ARAUCO CANADA LIMITED

Physical HDR

11

AV TERRACE BAY INC.

Physical HDR

8

AYPA POWER CANADA LP

Virtual HDR

29.7

BRUCE POWER INC.

Dispatchable Load

3.3

DEMAND POWER GROUP INC.

Virtual HDR

5.2

EDGECOM ENERGY INC.

Virtual HDR

48.7

ENEL X CANADA LTD.

Virtual HDR

97.5

ESSEX ENERGY CORPORATION

Generation

2

Virtual HDR

1

GC PROJECT LP

Virtual HDR

2.6

GERDAU AMERISTEEL CORPORATION

Dispatchable Load

72

GERDAU AMERISTEEL CORPORATION -CAMBRIDGE

Physical HDR

2.3

GOLDCORP CANADA LTD.

Physical HDR

6

GREAT CIRCLE POWER CORPORATION

Virtual HDR

19

GREAT LAKES COPPER LTD

Dispatchable Load

2.9

IROQUOIS FALLS POWER CORP.

Generation

118

KINGSTON COGEN LIMITED PARTNERSHIP

Generation

110

ONTARIO POWER GENERATION INC.

Virtual HDR

3.8

POWIN ENERGY ONTARIO STORAGE II, LP

Storage

6

PROCTER & GAMBLE INC.

Dispatchable Load

5.2

RODAN ENERGY SOLUTIONS INC

Virtual HDR

214.7

SAULT STE MARIE ENERGY STORAGE LP

Storage

1.7

UNIVERSITY OF GUELPH

Virtual HDR

1

VOLTUS ENERGY CANADA LTD

Virtual HDR

59.3

TOTAL

 

841.9

 

 

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