OPA resources to meet energy needs: baseload and intermediate resources

A variety of resources are needed to meet the energy needs of Ontario’s electricity system. Baseload resources are those required to run consistently throughout the year and to persist for the medium to long term. These types of resources include:

  • nuclear
  • solar
  • wind
  • hydroelectric
  • natural gas combined heat and power
  • energy efficiency conservation measures.

Baseload generation resources typically have higher fixed costs compared to their variable operating costs. The majority of the fixed costs are related to equipment and construction costs (capital costs), while the majority of the variable costs relate to fuel costs which are low because their fuel is either free (e.g., wind, solar) or relatively low cost (e.g., water and nuclear). The overall economics of a baseload facility improve the more the facility is used, since its fixed costs are spread over a greater level of output. The costs of conservation are paid up front with a stream of savings over time.

Intermediate resources also run consistently throughout the year, providing energy to the system. These resources have the ability to quickly ramp up and down, following changes in demand and changes in other resources throughout the day. They tend to have lower fixed costs, but higher variable costs. Combined-cycle natural gas is an example of an intermediate resource.

The costs associated with the baseload and intermediate generation and conservation resources procured and settled by the OPA are summarized in the Electricity Resource Costs to Meet Energy Needs table. Note that the costs disclosed are based on the actual performance of the OPA’s contracts as settled and contracted during the historical dates identified in the tables –  as such, these costs should not be used to project future costs. While generation and conservation resources differ in the way they are paid for and provide value to the electricity system, the methodologies discussed through the links below produce an average unit cost ($/MWh) to ratepayers and attempt to enable them to be comparable on a unit rate basis.

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Average unit cost methodology for baseload and intermediate resources ($/MWh)
Electricity resource costs to meet energy needs (baseload and intermediate resources)

Costs for gas and CHP projects
Prices for distribution-connected standard offer programs