Competitive power markets and grid reliability : keeping the promise

This white paper discussed various links between restructuring, competitive markets and reliability in the consolidation of electricity markets in Ontario. A historical approach was used, and the first section of the paper reviewed how reliability was managed in the pre-market period. The second section discussed the current reliability model and some of the general issues it has raised, as well as lessons learned. Structural reforms were reviewed. It was noted that currently dominant generators hold more market share than is compatible with ideas of workable competition. Issues concerning the mitigation of market power were discussed, with specific reference to the importance of public opinion. The need for mandatory standards and inclusive processes was emphasized, as well as the implementation of effective communication strategies and consumer education. A resource adequacy mechanism was recommended. The role of the Ontario Power Authority (OPA) was reviewed. Issues concerning consumer protection were examined. Future priorities included investment in infrastructure and reliability, as well as a realignment of markets. It was suggested that energy and reserve trading are critical for ensuring reliability in the market paradigm. Markets and inter-regional trading were discussed in terms of promoting reliability. Improvements in infrastructure were recommended, as well as a reduction in trade barriers. It was concluded that an over-arching, industry-wide commitment to investing in reliability is essential for managing the restructuring and reliability relationship in the years ahead. 15 refs