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Plugging into Savings: A New Incentive-Based Market Can Address Ontario’s Power-Surplus Problem

Listed author(s):
  • Bejamin Dachis

    (C.D. Howe Institute)

  • Donald N. Dewees

    (University of Toronto)

After years of looming power shortages, Ontario faces instead a periodic problem of excess electricity supply at the same time that new generation capacity is being added. Since Ontario government agencies that purchase power have long-term, fixed-price contracts with many electricity generators, Ontario consumers pay for electricity produced by some generators even when that electricity has little value, particularly during periods of high wind production and low demand.For the long term, the province should create financial incentives for constructing flexible generation capacity.

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Paper provided by C.D. Howe Institute in its series e-briefs with number 120.

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Length: 7 pages
Date of creation: Jul 2011
Publication status: Published on the C.D. Howe Institute website, July 2011
Handle: RePEc:cdh:ebrief:120
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