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 |