Toronto: The Independent Electricity System Operator announced December 16 that its second annual Demand Response auction resulted in increased participation and yielded prices for demand response capacity that are 12 to 17 percent lower than those achieved in 2015.
The auction is an annual competitive process through which demand-side resources are selected to be available to reduce their electricity consumption, as needed, during the summer of 2017 and winter of 2017/18.
In recent years, DR has helped reduce peak demand on summer days by as much as 1,200 megawatts. The auction marks the latest milestone in the IESO's ongoing efforts to expand Ontario's DR capabilities and transition multi-year, contract-based DR to a more cost-effective, competitive market-based platform. This structural change facilitates the entry of new DR suppliers and provides the IESO with greater flexibility to respond to changing system conditions and needs.
This was the second DR auction that the IESO has held. The first one was in December 2015. For the auction, participants were required to submit their demand reduction capacity (in MW) and their offer prices for the summer and winter periods.
The successful DR providers will be integrated into the electricity market along with generators and will help provide capacity to ensure the province's energy needs are met during peak hours.
Twenty-one organizations were registered as DR auction participants prior to the auction, an increase of five participants over last year's auction. The clearing price for the summer commitment period is $331.33/MW-day, and for the winter commitment period is $299.48/MW-day. This is a reduction of 12 percent for the summer and 17 percent for the winter commitment period when compared to the 2015 DR auction, reflecting good competition between existing resources and new entrants.
Proponents included high-volume transmission-connected industrial, commercial and institutional users, as well as local distribution companies and consumers whose facilities are connected to low-voltage distribution systems and whose contributions are managed by an aggregator. For the first time, residential homeowners, participating through an aggregator, were eligible to take part in the auction and were successful in being selected.
The full list of successful participants is as follows:
| Successful DR Participants | Summer Commitment Period | Winter Commitment Period |
| Enernoc Ltd. | 135.7 | 138.9 |
| Enershift Corporation | 91.7 | 124.4 |
| Gc Project LP | 3.7 | 8.3 |
| Gerdau Ameristeel Corporation | 72 | 72 |
| Gerdau Ameristeel Corporation -Cambridge | 2.4 | 2.4 |
| Nrg Curtailment Solutions Canada, Inc. | 49.7 | 45.5 |
| Ohmconnect, Inc | 12 | - |
| Resolute Fp Canada Inc. | 48 | 46 |
| Tembec Enterprises Inc. | 40 | 40 |
| Total | 455.2 | 477.5 |
Additional information about the auction is available at http://www.ieso.ca/Pages/Participate/Demand-Response-Auction/default.aspx.