On March 22, Leonard Kula, the COO of the IESO, announced the release of the high-level design for the Incremental Capacity Auction (ICA). The ICA is of great interest to generators because the IESO is planning to use it as a mechanism for securing new capacity in the medium to long term. It believes the ICA will be more cost effective than traditional forms of capacity procurement. Mr. Kula said, “the IESO is one step closer to introducing a competitive mechanism that will benefit all Ontarians by helping ensure that resources to meet evolving system needs are secured cost-effectively.”
The culmination of nearly two years of engagement, the IESO’s high-level ICA design reflects extensive reviews of capacity auctions in other jurisdictions and discussion with Ontario stakeholders. Mr. Kula said, “Thanks to the active participation of stakeholders, including organizations like yours, we now have a framework for a more transparent, efficient and cost-effective market design that will help us to achieve a reliable electricity system at lowest cost.” APPrO members and others have expressed concerns that the ICA, once its design features are better known, may not be as beneficial as the IESO’s original theoretical assessment projected.
Further information on the high-level design, including an executive summary and backgrounder are available on the IESO website. Stakeholder comments will be collected through the feedback form until May 17. The IESO will be hosting a technical question-and-answer session on April 23 in Toronto.
For further information see http://www.ieso.ca/Sector-Participants/Market-Renewal/Incremental-Capacity-Auction-High-Level-Design or email