The Independent Electricity System Operator (IESO), Ontario’s grid operator, released their 18-Month Outlook report this week. According to the report, which assesses the reliability of Ontario’s electricity system over an 18-month period, the outlook is positive. It’s forecasted that there is enough generation and transmission capacity to meet Ontario’s electricity demand from July 2015 to December 2016.
The report gives an overview of overall demand and annual peaks.
- Ontario’s grid supplied peak demand is expected to decline throughout the Outlook period.
- Energy demand is expected to show a small decline in 2015 before reversing in2016 due to increased industrial demand and the additional leap year day.
- Unlike previous years that experienced annual peaks in the winter months, the Outlook reports that annual peaks will occur during the summer. These could be as high as 24,700 MW in extreme weather conditions.
- Summer peaks will be somewhat flattened by the effects of conservation, time of use rates, increased embedded solar and wind generation, and the Industrial Conservation Initiative (ICI). The latter is a program that helps large energy consumers reduce their Global Adjustment costs by curtailing load during the top five coincident peaks.
Increased System Capacity
The forecast takes into consideration some changes to the system that will occur over the next 18 months.
- Approximately 2,200 MW of new supply will be added to the grid over the Outlook period, most of which is solar and wind generation.
- New opportunities for demand-side participation in Demand Response (DR) programs will be introduced over the Outlook period. This summer, the IESO is launching a DR pilot that will procure up to 100 MW from demand-side resources. Pilots are being launched in anticipation of the development of the DR auction, which will replace the existing Capacity Based Demand Response (CBDR) program. Participants will bid their load commitments into a market in a method similar to the energy market.
- In May 2015, the IESO signed a 500 MW capacity contract with Hydro Quebec. The agreement is an exchange between the two Provinces that allows for Quebec to import up to 500 MW in winter months and Ontario to import up to 500 MW in summer months. These imports are intended to help flatten seasonal peaks.
Finally, Ontario will continue its trend of experiencing Surplus Baseload Generation (SBG) during the next 18 months. With more generation online and a decline in grid demand, SBG is rising. However, the IESO expects to manage SBG through existing market mechanisms.