◊ Part of the ‘wind energy’ series of articles ◊
In Ontario wind energy is contracted to Independent Power Producers. Compensation for generators is largely determined by contractual terms specific to the program by which they are bound.
Ontario also has an energy market. The Market is extremely complex, however it is fundamentally how energy buyers and sellers come to financial agreement on price and volume. It is administered by the IESO. I have a high level explanation of the Market here. The ‘market price’ for the wind energy produced is not what generators get paid since there is a contract agreement that will override it. Those costs are part of Ontario’s Global Adjustment.
An important aspect of compensation for wind generators are Congestion Management Settlement Credits (CMSC). The CMSC provides the mechanism by which generators get compensation when they do not provide energy to the grid but are considered available. It is referred to as ‘constrained’, ‘curtailed’ or ‘dispatched down’. Generators will be compensated based on Market Rules and contractual agreements.
The exact amount of compensation paid to generators under the CMSC is not posted by the IESO, however a sample case was investigated by the ECO as detailed previously in my ‘Dispatch‘ article. It will vary based on energy volume and contract terms, however it has a significant impact on the unit-cost of wind energy.
The Ontario Market is in a renewal phase and is likely to experience significant change in the very near future. It is likely that the CMSC will be one of the items which will change resulting in lower overall energy cost.
In Ontario we pay for the wind energy available which may be more than what is produced.
Derek
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