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Ontario demand response auction nets lower prices, more participants

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Ontario demand response auction nets lower prices, more participants

Ontario's power grid operator said its latest demand response auction resulted in lower bids from a broader spectrum of participants, allowing greater flexibility in times of peak demand.

The Independent Electricity System Operator said the average annual clearing price among demand response participants is C$76,047/MW, down 1.6% from its 2016 average. The IESO said in a Dec. 15 statement that 35 organizations participated in the auction, including residential customers who participated through aggregators.

The program is designed to reduce the need for new or more-expensive generation when demand spikes hit Ontario's power grid. Participants in the auction agree to cut power consumption at the IESO's request to make more electricity available on the grid. The auction secured agreements to cut 570.7 MW in the summer peak period in 2018 and 712.4 MW during the 2018-2019 winter peak.

"Demand response is an important resource that provides us with greater flexibility to respond to changing system conditions and needs," IESO COO Leonard Kula said in the statement. "The auction enables us to acquire these resources in a competitive, cost-effective manner."

Aggregators made up three of the top four of 15 successful bids, and two companies comprised the largest amount of committed load. Boston-headquartered EnerNOC Inc., acquired by a unit of Enel SpA earlier this year, offered summer commitments of 161 MW of reduced load and winter commitments of 216 MW. Enershift Corp., a unit of Mississauga, Ontario-headquartered energy solutions provider Rodan Energy, offered commitments to shave 168.4 MW of consumption during the summer peak and 205.8 MW in the winter period. Gerdau Ameristeel Corp. was the biggest individual participant, offering to cut 72 MW of consumption at both seasonal peaks. Toronto Hydro Corp. made the biggest commitment among utilities, offering to trim as much as 10 MW during the summer peak.

The auction was the third annual event held by the IESO. The 35 participants more than doubled the grid operator's initial demand response auction in 2015.