By JoAnne Butler, Vice-President, Market and Resource Development, Independent Electricity System Operator
Joanne Butler, Vice-President, Market and Resource Development, IESO
It’s such an exciting time to be a part of the energy industry in this province. The IESO’s Market Renewal project will result in some of the biggest changes in our sector in recent memory. And never before in the more than 15 years since the market opened has there been such an opportunity for all stakeholders to participate in the implementation of a series of initiatives that will fundamentally improve how our market operates.
Right time, right place
When the market opened in 2002, it was clear at the outset that some enhancements were needed in order for the market to be more efficient, competitive, transparent and reliable. In the interim almost 20 years, the IESO focused on some key improvements, including changing and integrating a diverse supply mix into our markets, but some of the foundational issues remained.
Now, it’s time to address the underlying systemic issues and prepare the market for the future, including the growth of distributed resources, emerging technologies and the changing consumer landscape. Market renewal will lay the foundation for us to enable and facilitate this future.
The plan for market renewal does not represent the end of changes to an ever-evolving electricity landscape, but it does put us in a better position to make changes in the future. It does mean that we have to take the reins and fix the foundations. And we’re in a good place now. We have a stable supply of electricity into the early 2020s, almost two decades of experience with our own market, a body of knowledge to draw on from the experiences of other ISOs that have undergone similar change and a benefits analysis that shows that there is a net benefit of approximately $3.4 billion over a 10-year period.
Not in it alone
But there’s no point undertaking such a project if those who are impacted are not full participants in the way the change unfolds. To that end, stakeholder engagement has been a high priority throughout the market renewal process.
Our stakeholders are not reluctant to share their views and that’s good with us! We need to get market renewal right so all voices are welcome. In fact, we are, on an ongoing basis, adjusting the market renewal plans as we address issues of concern identified by our stakeholders.
Market participants, including your association representatives, have been integral in guiding the process and are important partners as we move forward towards creating a more efficient electricity marketplace.
What to expect
The last year has been busy for all of us working on this file. And the pace of activity will only be increasing. We have added two new initiatives to the market renewal work – Day-Ahead Market and on Enhanced Real-time Unit Commitment. The stakeholders working on the incremental capacity auctions and single schedule market initiatives continue to work through design options.
The Market Renewal Working Group will continue to help us guide our engagements – they will continue to focus on overarching strategic issues, linkages between the different projects and also help us work through any contentious items.
One strategic issue of utmost importance to me is our contracts. We recognize that a changing market will have impacts on some contracts but, it is important to know, we are not looking to extract value from our counterparties. We will be working collaboratively with all involved to ensure that any contract changes are about the orderly implementation of the market renewal initiatives and focus on consistency, simplicity and fairness.
When it comes right down to it, we have a $17-billion electricity marketplace that plays a central role in coordinating the supply of electricity between generators and consumers so it’s important to get these changes right. The market renewal work we have begun with stakeholders will create a marketplace that reduces waste, lowers costs, create more opportunities and certainty for system participants, ensuring that the province is prepared to meet future electricity needs as the sector evolves.
Stay tuned …
I was honoured to be asked to speak about market renewal at APPrO’s 29th Annual Canadian Power Conference and Network Centre. I hope you will have a chance to join me then.
If you can’t make it to the conference and would like to know more, I would encourage you to visit the IESO website or contact