Ontario completely phased out coal generation in 2014, and replaced it with increased wind, solar and natural gas generation. The province now generates 58% of its electricity from 18 of Canada’s 19 CANDU nuclear reactors. In 2016, hydro was Ontario’s second largest source of electricity. Non-hydro renewables experienced strong growth under the feed-in-tariff program, with solar capacity increasing by ~30% annually since 2005.
Ontario is structured as a competitive wholesale market with energy transacted on a real-time (5 minute) basis. Capacity and ancillary service requirements are addressed through bilateral contracts.
The market covers the province of Ontario and is interconnected with the province of Quebec on the east and Manitoba on the west, as well as the states of Minnesota, Michigan and New York to the south.
Nodal pricing does not exist in Ontario except for at interconnection points with neighboring regions.
There is no liquid market for buyers to hedge price risk in Ontario. Wholesale long-term power purchases are generally not available. Retailer power purchases are available for customers via distribution companies and retailers and marketers.
Many consumers receive power from their local utility (the utility covering the geographic area in which the load is located). Consumers can also opt to buy power directly from a generator, or through a retailer (in provinces where competitive retail markets exist) though the utility will continue to charge certain fees (i.e. transmission/distribution/other system fees).
Ontario currently offers retail choice.
In general, a bill can be broken into three components: generation, transmission and distribution. Generation costs are broadly correlated with wholesale energy prices, transmission costs are socialized across all consumers, and distribution costs vary based on the local cost of each utility. Other system and social charges (such as to support energy efficiency programs) are generally socialized across consumers and are also reflected on the bill from the local utility.
A REC (Renewable Energy Certificate) tracking system has not been adopted in Ontario. Generators located anywhere in the U.S. or Canada may register with the North American Renewables Registry. Renewable generation may also be eligible for certification and tracking in regions outside of Ontario.
How are RECs (Renewable Energy Certificates) procured? N/A
Are renewable Power Purchase Agreements (PPAs) available? No
Are Green Tariffs available? No
System Operator:
Key Government Departments:
Regulators:
Hydro
Wind
Solar
DG Solar