Operational Outlook

Ioan Agavriloai, Manager, System Performance & Models June 12, 2013 Hydrail Conference

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Who We Are and What We Do

• Direct the flow of electricity to meet the province’s power needs

• Balance demand for electricity against available supply through the wholesale market

• Manage the $10-billion wholesale market

• Oversee emergency preparedness activities for Ontario’s power system

• Send real-time price signals to trigger demand response

Electricity Sector

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Ontario Hydro

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Ontario at a Glance

Installed Capacity 35,850 MW Record Summer Peak

27,005 MW (August 1, 2006)

Record Winter Peak 24,979 MW (December 20, 2004)

Total Annual Energy Consumed

141.3 TWh (2012)

Customers 4.7 million Ontario Import Capability

4,800 MW

Transmission Lines 30,000 km (18,600 miles)

Interconnections New York, Quebec, Manitoba, Michigan, Minnesota

The IESO is the reliability coordinator for Ontario and works closely with other jurisdictions to ensure energy adequacy across North America.

An Evolving Supply Mix

2003 Ontario government commits to coal closures 2005 Lakeview Coal Generating Station closes 2006 First wind farms commissioned 2009 Ontario announces Feed-In- Tariff program 2009 Demand decreased 6.1% compared to the previous year 2010 Ontario Long Term Energy Plan – 10,700 MW of renewable energy 2011 3.6 million Ontarians on TOU rates 2013 Most of remaining coal facilities in Ontario to close

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An Evolving Supply Mix

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Nuclear Nuclear Nuclear Nuclear

Hydroelectric Hydroelectric Hydroelectric Hydroelectric

Coal Coal

Oil/Gas Oil/Gas Oil/Gas Oil/Gas

Wind/Solar Wind/Solar Wind/Solar Wind/Solar

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2009 2012 2015 2018

MW

Year

Installed Capacity by Fuel Type

Nuclear Hydroelectric Coal Oil/Gas Wind/Solar Biomass/ Landfill Gas

Ontario’s Generation Fleet: Operating Characteristics

Dispatchable Baseload Variable

Natural Gas

Nuclear and Baseload Hydro

Wind and Solar

Peaking Hydro

The changing supply mix is challenging our ability to effectively balance supply and demand.

Need flexibility to: • Provide load following • Provide ramping • Manage surplus baseload generation (SBG) 7

Wind & Solar Variability: A System Operator’s Perspective

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Wind and solar output varies depending on the day, but no one day is like another.

The IESO needs to know which day to expect so it can efficiently plan & operate the system.

Wind

Solar

Ontario’s Changing Demand Profile

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

1:00am 5:00am 9:00am 1:00pm 5:00pm 9:00pm

Meg

awat

ts (M

W)

2011 Daily Profiles

January 24 April 5 July 21 9

• Low-carbon supply mix

• Extracting flexibility from all sources

• Significant amounts of visible, distributed generation

• Adequate supplies to meet needs

Integrating Supply and Demand

Supply Demand • Lower demands • Flexibility

through demand response

• Increasing growth between highs and lows

• Emerging technologies

• Electrification of transportation

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How does the IESO support this change?

• Engage with the sector about

the future • Adapt to change • Provide dynamic price signals • Enable broader participation

Renewable Integration: Areas of Focus

Forecasting

Ability to predict output from variable resources is essential for maintaining system reliability and market efficiency

Visibility

New processes such as direct telemetry and reporting ensure visibility of large-scale embedded wind and solar generators

Dispatch

Integration of renewables into the economic dispatch will address issues like surplus baseload generation

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Engaging and Empowering Consumers

• Commitment to increase demand-side participation in the market

• Consumers can be an important resource to help meet our capacity and operability needs – Peak management and load-

shifting – Ancillary services (incl.

regulation) – System services (ramping, load

following, SBG relief) • Over 4 million Ontarians now

billed on TOU rates - helping increase awareness of household energy use

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Emerging Technologies

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Emerging technologies provide benefits: • Increased flexibility • Leverage and optimize existing

infrastructure • Peak management and load shifting • Other reliability-related services (i.e.,

ramping, load-following, SBG relief) • Deferred or diminished capital

investments • Potential for economic development and

job creation

Emerging Technologies

The IESO is looking into how emerging technologies can help system operations: Three new (non-generation) vendors have been selected to provide regulation service:

– ENBALA Power Networks (aggregated loads, up to 4 MW)

– NRStor and Temporal Power (flywheels, 2 MW)

– RES Canada (battery storage, 4MW) 14

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