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Explainer: Capacity Auction Standby and Activation Calls

This article will briefly outline why standby and activation calls are issued in normal circumstances and will explain reasonings for the IESO’s recent increase in calls.

Over the past few weeks, the Independent Electricity System Operator (IESO) has issued an unusually high number of standby calls to participants in the Demand Response (DR) program. Although this might be frustrating for DR participants and has kept us all busy recently, there are good reasons to explain the recent increase in calls.

There are two forms of calls the IESO will issue associated with this program - Standby Calls and Activation Calls. These calls are both issued in the form of a report sent to DR participants.

A Standby call will be issued to inform participants ahead of time that their demand reduction capacity might be called upon in the following dispatch day. Standby calls can be received between 5 pm on the day ahead up until 7 am on the dispatch day. Once on standby, the IESO can issue an Activation Call to inform the participant they must actively reduce their demand for 4 hours - these calls are issued at least 2 hours before action by the participant is required.

Both forms of calls can be expected when the IESO predicts that demand on the grid will be high. These high-demand periods often coincide with Industrial Conservation Initiative (ICI) Peak Days and as such there are multiple incentives in place for large consumers to reduce their load at these times. This means that sometimes the IESO will issue standby calls for DR participants but then the curtailment efforts of ICI program participants turn out to be enough to manage the peak. Therefore, DR assets were on standby and were ready to be deployed but were not required – hence no activation call was issued.

On the other hand, if the curtailment of ICI participants was not enough to manage the peak, then the IESO would activate the DR resources that were on standby to reduce the demand even further. This is just one example of where a standby call could be issued by itself or followed up with an activation call.

With regards to the recent increase in call activity, the following points can explain the IESO’s actions:

1. The IESO is expecting emergencies: For several reasons, the IESO is expecting energy emergencies in the near future. They are on their toes and want to ensure that DR participants are ready to respond should the need arise. Potential reasons for these energy emergencies include fossil fuel shortages, grid shortfalls, inconsistent renewable generation, power plant maintenance and shutdowns. By issuing standby calls for multiple days in a row they have peace of mind knowing DR participants are ready to respond should an emergency occur.

2. Tests are being carried out: This can partially be explained by the point above, but a portion of these standby calls are simply the standard tests that the IESO carries out for each participant or aggregator every year to ensure they can fulfill their submitted capacity requirements. It just so happens that these tests are coinciding with other events that are exacerbating their effect. If a participant or aggregator fails to meet their capacity requirements for the first IESO test, then a follow-up test will be arranged to give them a second chance – some of these follow-up tests have occurred recently and can explain a portion of the calls being issued.

3. HOEP Spikes are predicted: Finally, the IESO has predicted that the Hourly Ontario Electricity Price (HOEP) will be spiking and could be approaching their set emergency thresholds. Therefore, they might require Demand Response assets to be activated to keep these prices in acceptable ranges and thus require more assets to be ready on standby.