Ontario's grid operator will partner with utility owner Alectra Inc. in a pilot project that would allow local power producers to sell surplus electricity within their urban area in a bid to reduce the need for future transmission infrastructure.
The so-called local electricity market is slated to begin operations in the York region near Toronto in the second quarter of 2020, according to a statement from the Independent Electricity System Operator. Owners of solar power systems and energy storage and consumers capable of reducing their electricity usage will be allowed to compete with regular grid resources during periods of high demand in the demonstration project. The IESO and Canada's energy and natural resources department will fund the program.
Power demand is rising in Ontario, particularly in the heavily populated southern region of the province. Demand in the York region is expected to outstrip the capacity of the existing system within a decade, which is one of the reasons the IESO chose it for the pilot project. The grid operator is looking for ways to reduce transmission and power costs through distributed energy resources as part of its innovation initiative. Canada's most populous province is in the process of revamping its electricity markets and the IESO will run a capacity auction in December.
"This project will help us better understand the potential of using distributed energy resources in place of traditional infrastructure by evaluating them in real-world applications," Alectra CEO Brian Bentz said in a news release Aug. 29. The utility serves approximately 1 million customers in communities surrounding Toronto.
