An efficient power system requires a balance of resource capabilities to meet the daily and seasonal requirements for capacity, energy, operating reserve and other services, and to do so in the most economic manner. Finding the right mix of resources requires balancing resource operating characteristics with their cost structures and environmental impacts.
Types of resources
There is a component of Ontario’s load that persists all day every day. This is referred to as baseload. In addition, each day a component of the load rises in early morning, culminating in what is called the daily peak – usually in late afternoon. This component of the load then falls overnight to begin the cycle again. Superimposed on this daily cycle are seasonal increases and decreases.
As a result, there will be some resources that will be needed continuously and will be expected to run as much as possible to their full capability. They will tend to run continuously, except when maintenance is required. These are referred to as baseload resources.
Other resources will only need to run part of the time, as load increases and as other facilities need to be maintained or are unavailable for other reasons (i.e., insufficient wind speeds to power wind turbines). Resources that typically run when demand for electricity is at its highest are referred to as peaking resources. Resources that follow changes in demand throughout the day, providing both energy and capacity to the system, are referred to as intermediate resources.
There are two main components to consider related to the cost of the resources: fixed costs and variable operating costs. Fixed costs include costs to build the facility, to staff it during its operating life, and to maintain it no matter how much it runs. Variable costs include fuel costs, and in some cases a small amount of maintenance costs that vary with the amount of energy the facility produces.
For energy efficiency resources, the fixed costs are the incentive paid to the customer to invest in energy efficiency and program administration costs. There are no variable operating costs. For demand response (DR), the fixed costs are the capacity payments made to DR participants to be available, and the variable costs are the availability payments made when a DR event is called.
In 2012, Ontario’s supply mix included a diversified mix of resources to meet the system’s energy and capacity needs. The figures below provide a summary of the total contracted nameplate capacity for baseload/intermediate and peaking generation and conservation resources that have OPA contracts and are paid directly (i.e., settled) by the OPA.
Contract Nameplate Capacity for OPA - Settled Generation and Conservation in 2012