The Independent Electricity System Operator (IESO) is responsible for operating Ontario’s electricity market, managing the province’s power grid and ensuring Real-Time operations run smoothly. With the introduction of the IESO Market Renewal Program (MRP), significant changes are reshaping how market participants engage with the system. Whether you’re an Independent Power Producer (IPP), a Price Responsive Load (PRL) company, or involved in Demand Response, understanding these changes is crucial for successfully navigating this new landscape.
Locational Marginal Pricing (LMP) and Day-Ahead Market (DAM) have been introduced with IESO MRP to enhance Real-Time market operations, all designed to improve market efficiency and help participants better plan and manage their resources. For those looking to enter the IESO market, these changes present both opportunities and challenges.
Here’s what you need to know to make the transition into the IESO market as smooth as possible.
Day-Ahead Market: A new level of resource planning under the IESO MRP
One of the most impactful changes in the IESO MRP is the introduction of the Day-Ahead Market (DAM). This new feature allows market participants to submit bids and offers a day in advance, which provides:
- Better resource planning for IPPs
- Improved scheduling efficiency for Price Responsive Load (PRL) companies
- A more structured way to participate for Demand Response providers
For IPPs and other participants, DAM creates a more predictable environment, reducing uncertainty around resource commitments and costs.
Read our blog post, “Day Ahead vs. Real-Time Market: What’s the Difference?”
Enhanced Real-Time operations: Adapting to a faster market
The MRP also improves Real-Time market operations. Key enhancements include better dispatch instructions and improved integration between market and grid operations. These updates provide:
- Faster decision-making capabilities for participants
- Improved operational efficiency for energy resources
- A more reliable and responsive electricity system
Participants entering the market need to be aware of these changes to stay competitive in the IESO market, where Real-Time performance will be more critical than ever.
Settlement considerations: Key insights for new market participants
The MRP brings significant updates to the settlement process that prospective market entrants should understand before participating. These changes, including new charge types and updated equations for Real-Time transactions, affect how companies manage costs and track performance in Ontario’s evolving energy market. For companies looking to enter the IESO market, understanding the following settlement adjustments can help in preparing effective entry strategies:
- New settlement structures that may differ from models in other regions
- Additional charges introduced under the MRP, such as Real-Time make-whole payments, which can impact cost management
Familiarizing yourself with these changes in advance can help optimize your approach to market entry . To simplify your entry into this market, explore PCI’s solutions on our Settlements and Billing page.
Looking ahead: Preparing for success in the IESO market
The IESO Market Renewal Program represents a significant overhaul of Ontario’s electricity market, with far-reaching implications for market participants. Whether you’re an IPP or a company exploring opportunities through PRL or Demand Response, understanding these key changes will set you up for success as you enter the market. With the introduction of the Day-Ahead Market, enhanced Real-Time operations, and updated settlement procedures, navigating the IESO market is more complex but also full of new opportunities for those prepared to adapt.
PCI Energy Solutions is a trusted partner for successful market participation. Visit our Canada markets page to learn more and we can support you in your participation in Canadian markets.
