IESO Releases the 2021 Annual Acquisition Report

Today amid broad stakeholder anticipation, the Independent Electricity System Operator (IESO) released the Annual Acquisition Report (AAR).  The purpose of this report is to identify the precise tools, targets and timing the IESO will use to meet Ontario’s electricity market needs identified in the 2020 Annual Planning Outlook (APO).

As a reminder, the IESO’s Resource Adequacy Framework (RAF) defines a process, informed by the APO, for assessing bulk system and regional resource needs arising in the coming years, and the subsequent procurement methodology to be considered for securing those resources.  These tools were approved by the IESO Board of Directors last December, and by the Government of Ontario in the recent Letter to the IESO on May 31st. The RAF includes the following:

• A Capacity Auction for short term needs, characterized by annual procurements and short delivery periods;
• Medium Term Commitments, run cyclically as an RFP or enhanced Capacity Auction and characterized by multiple year (3-5) commitment periods;
• Long Term Requests for Proposal(s) (RFPs), run periodically and characterized by longer term (7+ year) commitment periods; and
• Bilateral Negotiations, either for assets that are deemed essential in addressing system needs, reliability must run (RMR) agreements, or as directed by government.

The Unsolicited Proposal Framework, otherwise known as the Gated Assessment Process, is also mentioned in the AAR. That said, this is a government-led process managed by the IESO, explicitly for projects to which no competitive procurement solicitation exists, but where those projects may hold ratepayer saving and electricity system benefit potential.

The IESO hopes the AAR provides enough clarity on upcoming market opportunities to enable companies to begin necessary project preparations and investment decisions to facilitate sufficient market competition in the upcoming procurement opportunities.

Read the full update here.