IESO Consultation on the Transitional Capacity Auction

Last week on March 7th, the IESO held a stakeholder consultation on their plans to meet Ontario's Capacity Needs through the mid-2020s. Materials for the meeting can be found here.

As was previously announced by Peter Gregg, President and CEO, the IESO is proposing to expand the existing Demand Response (DR) Auction to also include generation resources.  They are calling this new mechanism the Transitional Capacity Auction (TCA).  The IESO is planning to have the TCA enable an effective transition to the first Incremental Capacity Auction (ICA).

The first TCA is targeted for December 2019 and will be designed according to the following schedule:

The IESO envisions to continue to evolve the TCA through the first two to three phases.  The current timelines would be to hold the first ICA in Q4, 2022 with a first delivery period of the Summer of 2025.  The full TCA and ICA schedule is outlined below:

The IESO also did launch an initial consultation on design elements.  Many of the questions focused on the amount of capacity that will be procured through this mechanism, how the products will compete against one another, and why other forms of services are not also being allowed to compete.  To-date, the IESO has said it would specifically target capacity coming off contract, or incremental capacity available from existing facilities, that is dispatchable.  The specific qualifying details are yet to be confirmed through the stakeholder process.

Sussex will continue to monitor these developments and would be happy to analyze potential impacts and opportunities for your commercial interests.  Please do not hesitate to reach out to us should you have any questions.