Ontario’s power market just took a major leap forward with the launch of its new nodal day-ahead market, joining the ranks of other North American ISOs with more granular, location-specific trading.
While this change brings the Independent Electricity System Operator (IESO) closer to its peers in terms of market structure and efficiency, one thing remains uniquely Ontario: its approach to capacity. Instead of a formal capacity market, the province continues to rely on the Global Adjustment Charge (GAC), a mechanism that covers the gap between the total compensation for some contracted generators and any offsetting market revenues.
The twist? When energy prices drop, the GAC goes up – and it’s often the biggest line item on wholesale power bills.
Get all the details in the full article by Peter Kelly-Detwiler, Around the Corner: Nobody Does Capacity Quite Like Ontario.