“Gradually, then suddenly”, wrote Ernest Hemmingway almost a century ago. In three words, he summed up how change occurs in nearly every sector of our world. When it comes to Ontario’s energy infrastructure and its future, no other words suit better than Hemmingway’s.
But change, however inevitable, needs to be properly prepared for. It needs a vehicle for a smoother arrival. And for Ontario’s energy sector, that vehicle is the Independent Electricity System Operator (IESO). Let’s dive into the IESO story.
What is the IESO?
Founded in 1999, albeit with a different name then, the IESO is a not-for-profit crown corporation. It is responsible for operating the electricity market in Ontario. Here’s a quick look at its key responsibilities.
“Connecting Today. Powering Tomorrow”, reads the IESO website’s homepage in large letters. And though we mentioned IESO’s responsibilities in preparing for the future, it handles quite some important stuff in the now.
The IESO ensures the reliability of the province’s power system, balancing the supply of, and demand for electricity. It does this on a second-by-second basis, directing its flow across high-voltage transmission lines. This ensures the availability of electricity to Ontarians when and where they need it.
To ensure power delivery 24 x 7, the IESO monitors generators, transmitters, and distributors who own and maintain the lines through which the electricity travels, as well as electricity consumers of all sizes. It does this by working with both the Canadian and US entities to ensure seamless power transmission.
Overseeing the Electricity Market
The IESO oversees Ontario’s wholesale electricity market by operating and settling it. It also claims to encourage the effective participation of more and more market entities, including customers. One of its responsibilities in this area is holding the annual auctions for capacity.
Delivering Energy Efficiency
One of the most important roles of the IESO is promoting energy efficiency through programs that delay the necessity for more power infrastructure. The programs include demand management and energy efficiency initiatives. Most of these initiatives are primarily geared towards heavy energy consumers – industrial and commercial.
An excellent example of the same is the Save on Energy program, which encourages the adoption of energy efficiency measures through various incentives. Here’s what it has to offer for different consumer groups:
For homes – Energy Affordability Program (free home energy needs assessment, free energy saving kits)
For small businesses – Small Business Program (incentives of up to $2500)
For business and industry – Retrofit Program (multiple incentives starting from $500, covering HVAC, lighting and other retrofit-eligible systems)
Planning for the Future
As Hemmingway said, change often happens slowly and then all of a sudden. As such, it doesn’t make sense to wait until a major shift in the energy landscape happens. And that is why the IESO readies itself and Ontario’s energy infrastructure for what lies ahead. This includes mainly the forecasting of energy consumption in the coming years, specifically, the next 20 years.
The IESO procures the resources needed to meet these future requirements.
Besides the above tasks, the IESO is also involved in engaging stakeholders and communities for planning and development. It also handles governance, being a not-for-profit corporate entity. All of its licenses and fees are set by the Ontario Energy Board (OEB). Lastly, the IESO is also responsible for the province-wide metering systems, being Ontario’s designated Smart Metering Entity (SME).
IESO and Innovation
For about a century since humans started using electricity, very few changes occurred in how power was generated and transmitted. However, the past couple of decades has accelerated change, with newer, greener, and more efficient tech as well as the need for a cleaner system.
As the IESO puts it, ‘in an increasingly decentralized electricity system, the growing incidence and sophistication of cyber threats and more extreme weather events, determining how to capitalize on the opportunities and address the challenges in front of us have never been more important.’
With that in mind, IESO has created an Innovation Roadmap. It involves planning ahead for emerging technologies, new business models, new practices, regulatory or policy constructs, and existing solutions that are used in novel ways.
The IESO has prepared its first Innovation Roadmap by following a four-step process. It started with soliciting the input of stakeholders and assessing existing and emerging challenges and concluded with the development of a multi-year work plan to focus and coordinate IESO and sector efforts.
Choose any piece of information on Distributed Energy Resources (DER) and you will find that it is touted as the future of energy. For a long time, technology restricted energy generation to a single point. But now, the advent of new technologies has made localized power generation far easier.
This challenges the idea and necessity of long-distance power transmission. And it would not be a surprise if the world is full of DERs in the near future. The IESO has identified this and has put in place a DER roadmap. It includes feasibility studies and more importantly wholesale market integration, transmission-distribution coordination, and other areas of work. We will discuss the DER Roadmap in more detail in another article.
For now, we hope you have a good overview of the IESO and its work. In the next articles, we will discuss what IESO’s work means for industries and other power consumers, and how they can benefit from it.