Robert Doyle Section Head, Customer Outreach IESO What Were Seeing - PowerPoint PPT Presentation

Understanding Global Adjustment Robert Doyle Section Head, Customer Outreach IESO

What We’re Seeing Now • Reliable, even under extreme hot or cold weather conditions • Coal in final stages of shutdown process, on schedule for 2013 phase-out • Demand Response: significant … and growing • Renewables to reach 7000 MW by early 2015 • Increased volume, frequency and duration of Surplus Baseload Generation

Wind and Solar Integration New Renewable Capacity Sept 2013 - Feb 2015 • 3,800 MW of new 4500 grid-connected 4000 renewable resources 3500 • Wind dispatch gives 3000 another source of 2500 Hydro MW Biomass flexibility. Other 2000 Solar 1500 changes include in Wind 1000 visibility and 500 forecast 0 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 3

Traditional Response to Consumer Demand

Engaging and Empowering Consumers at All Levels Look to consumers as a key resource to help meet its capacity and operability needs, e.g. • Peak management and load-shifting • Ancillary services • System services (ramp, load following, SBG relief)

Ontario’s Changing Demand Profile 30000 All-Time Peak 25000 2013 Peak 20000 MW 15000 10000 5000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 6 Hour

A New Role for Demand Response? Market prices reflect the changing conditions, sending an clear signal to consumers and producers These needs are much more fine-tuned and can vary widely - need ways to integrated new types of flexibility. 7

New Opportunities for Demand Response • Demand response having a significant impact on system: – GAA and DR3 reducing summer peaks ~900 MW – TOU and peaksaver – Regulation Service • Future benefits – complement wind and solar – enable customers to manage electricity use • New opportunities to allow DR participants to compete directly with generators

Understanding Global Adjustment

Wholesale Market Price and Global Adjustment • Market price provides signal of short-term supply and demand • There is an inverse relationship between the Global Adjustment and the wholesale market price • GA is the difference between the total payments made to certain contracted or regulated facilities and any offsetting market revenues • Payments reflect fixed cost recovery guaranteed by contracts and regulated payment amounts. Also includes costs related to conservation programs 10

Electricity Pricing Trends 9 8.53 8 7.37 7.16 7 6.52 6.27 6 5.57 5 ¢/kWh 4 3 2 1 0 2008 2009 2010 2011 2012 Jan-Oct 2013 Hourly Ontario Energy Price Global Adjustment

Pricing Overview 12

Flexible solutions for capacity Largest component of GA is paying for capacity How can capacity needs be communicated to generators and loads through prices? New technologies or different participants could compete to offer more flexible or cost effective alternatives 13

Global Adjustment on the web www.ieso.ca/globaladjustment 14

Managing your Consumption • Know when you are using electricity and how much it costs • Analyze monthly and daily demand data • Work with your local distribution company to get access to your data

Electricity use dips on weekends and nights

Using Market Signals Ontario Demand Avg cents/kWh # of hours <24,000 MW 12.2 cents 9 22,000-24,000 MW 6.6 cents 120 20,000-22,000 MW 4.1 cents 367 <20,000 MW 2.1 cents 8,288 www.ieso.ca/peaktracker

Market Development • Market – based approach offers opportunities to integrated more demand response and other technologies • Develop the Ontario wholesale electricity market to support: – Transparent and efficient price signals – Open access for all types of resources 18

IESO Publications • Global Adjustment Primer • Electricity Insider (quarterly) http://www.facebook.com/OntarioIESO • Managing Your Electricity Costs: A Guide for Business http://twitter.com/IESO_Tweets • Weekly Bulletin (email) 19