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Integration of Renewables into the Ontario Electricity System

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  • Brian Rivard and Adonis Yatchew

Abstract

The Ontario electricity industry has a 'hybrid' structure: electricity is bought and sold in a competitive wholesale electricity market while supply mix planning and procurement are conducted through a government agency. Most generation is secured through long-term contracts. Aggressive renewable energy programs have led to rapidly growing renewable capacity, mainly wind generation. Coal-fired generation has been eliminated and electricity sales have dropped. The competitive hourly market price has declined and there is a clear merit-order effect: an increase of wind generation from 500 MW to 1500 MW can be expected to decrease price by 7 CAD/MWh. However, the all-in price, which incorporates contractually guaranteed supply prices, has risen from about 60 to 100 CAD/MWh between 2009 and 2014. Operational and market integration of renewable resources has been achieved relatively smoothly. The procurement process is over-centralized: increased reliance on market discipline and greater separation between governmental policy makers and regulators would enhance both the efficacy and efficiency of decarbonization policies.

Suggested Citation

  • Brian Rivard and Adonis Yatchew, 2016. "Integration of Renewables into the Ontario Electricity System," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    • Handle: RePEc:aen:journl:ej37-si2-rivar
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    References listed on IDEAS

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    2. Das, Runa R. & Martiskainen, Mari & Bertrand, Lindsey M. & MacArthur, Julie L., 2022. "A review and analysis of initiatives addressing energy poverty and vulnerability in Ontario, Canada," Renewable and Sustainable Energy Reviews, Elsevier, vol. 165(C).
    3. Simshauser, Paul, 2019. "Missing money, missing policy and Resource Adequacy in Australia's National Electricity Market," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    4. F. Ignacio Aguilar & Robert B. Gibson, 2023. "Advancing a New Generation of Sustainability-Based Assessments for Electrical Energy Systems: Ontario as an Illustrative Application—A Review," Energies, MDPI, vol. 16(17), pages 1-26, August.
    5. Mordue, Greig, 2017. "Electricity prices and industrial competitiveness: A case study of final assembly automobile manufacturing in the United States and Canada," Energy Policy, Elsevier, vol. 111(C), pages 32-40.
    6. Jacques Percebois & Stanislas Pommeret, 2021. "What can be learned from the French partial nuclear shutdown of 2016?," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2021(1), pages 5-19.
    7. Ignacio Mauleón, 2020. "Economic Issues in Deep Low-Carbon Energy Systems," Energies, MDPI, vol. 13(16), pages 1-32, August.

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