Groups involved in the energy market in Ontario, Canada, have joined in a pilot project to simulate a local distribution energy trading market platform, designed to demonstrate improved customer participation on the grid along with electricity cost control. The project, which involves three local distribution companies (LDCs), along with the province’s grid operator and the Independent Electricity System Operator (IESO), aims to provide a model for areas that want to study the economic and technical impacts of creating a localized energy market that would allow LDCs to utilize distributed energy resources (DERs), including smaller solar power installations, electricity storage, small natural gas-fueled generators, and electric vehicles (EVs). The participants said the pilot project will demonstrate the benefits of a dynamic market platform and how it can optimize the use of DERs, looking at the value of DERs to the grid, and removing barriers to DER participation. It also could help in the development of distribution locational marginal pricing (DLMP) models, and in this case, support the evolution of Ontario’s electricity system, while highlighting the value of renewable energy.
“There is a need to facilitate market participation of grid-edge devices, with transactions and markets that consider the unique capabilities of those resources as distinct from larger generators,” Ben Ullman, product manager for Transactive Energy at Opus One Solutions, whose GridOS software is the backbone of the project, told POWER. “That need is codified in regulations such as FERC 2222 [for the U.S. market] which allow for market participation of DERs above 100 kw, as well as core to projects… in which local devices participate in a market for constraint management.”
The participating LDCs are contributing to the project by hosting the network model being developed in the pilot. The IESO, as the province’s electricity market operator, contributes by bringing its power market experience, along with price signal data, and by providing financial support.
Katherine Sparks, director for Innovation, Research, and Development at the IESO, said, “Ontario businesses and communities are increasingly using technologies like solar panels, energy storage, and demand management tools to meet their own energy needs. This project joins other pilot projects across the province that the IESO is testing to see how we can organize these resources through local electricity markets, so they can help meet growing electricity demand, improve reliability, and drive down costs.”
1. Hydro Ottawa in 2016 became the sole owner of the generation assets at the interprovincial Chaudière Falls site, with the purchase of a 27-MW station from Hydro Quebec. Courtesy: Hydro Ottawa
The LDCs involved in the project are Hydro Ottawa (Figure 1), Toronto Hydro, and Bracebridge Generation, a municipally owned generation company that has operated in the province since the 1890s. Bracebridge today operates nine generating plants in five area watersheds. Hydro Ottawa has been in operation since 1916; Toronto Hydro has operated since the early 1900s.
Vince Kulchycki, COO of Bracebridge Generation, said the project is important for the utility’s future operations. “Our organization is currently looking at DERs, how they will affect the grid, and how they can improve our electricity system,” said Kulchycki. “This project is providing solutions that work hand in hand with our assets, offering market access in a way that will benefit our customers.”
The project utilizes Opus One Solutions’ GridOS Transactive Energy Management System, which in this case simulates a local and operational transactive energy market. Opus One said that in the simulation, aggregators submit their bids and offers for registered DER assets in day-ahead and same-day markets. The platform then generates location and time-specific price signals to enable system operators to create coordinated dispatch schedules, with a goal of allowing the grid to continue operating safely, while highlighting the locational value of DER services. The LDCs then have “the ability to use the platform to evaluate how DERs can serve load and resolve system constraints through market-based contracts, creating market paths to revenue for DER services based on capacity, energy, and system resiliency,” according to the companies.
“The software is well-suited to market operation regardless of whether the network is rural or urban, as long as there are participants and data informing system needs and capabilities,” Ullman told POWER. He said, “The collaboration between Opus One and the LDCs demonstrates a path to market access for DERs through energy system coordination. That coordination results in time- and location-specific compensation for DERs based on not only utility programs, but also bulk-system programs, and provides a path to societal compensation for carbon abatement.”
The LDCs are looking at the project as a way to demonstrate a market-based revenue model for DERs to provide energy and ancillary services. That would allow the LDCs to provide economical energy services, while continuing to ensure reliable and resilient grid operation. The companies said that focusing on the “network impact of DERs by combining all asset types into a centralized market grants open access to market participants, and more equitable, streamlined cost socialization for the LDC.” Said Ullman: “The advantage for the utility is lower energy costs for consumers as well as increased system reliability through use of customer-owned assets.”
The project is aligned with Canada’s goal of net-zero carbon emissions by 2050, which includes support for innovative technologies in the energy sector. “Due to the goal, LDCs will need to adapt and adopt these technologies to reduce greenhouse gas emissions and reach climate action goals,” said Hari Subramaniam, Chief of Strategic Growth and Commercial Officer at Opus One Solutions. “The marketplace developed through this project provides an opportunity for LDCs to empower their customer base to participate in energy transition while ensuring cost consciousness.”
“Transactive Energy is important to help our grids be more cost-effective and enable more direct customer participation. We aim to support our customers to adopt DERs, to empower them to make energy choices that meet their needs, and to build a more sustainable future,” said Guillaume Paradis, Chief Electricity Distribution Officer at Hydro Ottawa. That sustainable future includes the push for decarbonization, which needs continued growth of the use of cleaner energy resources.
Ullman told POWER, “The market optimizes participation of voltage, electric vehicles, battery, and demand management programs to minimize energy costs while allowing the system to run safely. The market’s network model evaluations allow for increased solar and EV adoption through smart scheduling that curtails or consumes when safe for the grid.”
Todd Smith, Ontario’s Minister of Energy, said, “Partnerships and collaborations like this help to strengthen the reliability and affordability of Ontario’s electricity system. Through initiatives like the IESO’s Grid Innovation Fund, Ontario will continue to demonstrate our leadership in advancing innovative technologies throughout the energy sector.”
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).