Category: 📘 Glossary & Acronyms
Market Renewal Program (MRP)
A major initiative led by the Independent Electricity System Operator (IESO) to redesign Ontario’s wholesale electricity market to improve economic efficiency, transparency, and reliability.
The Market Renewal Program (MRP) is a comprehensive redesign of Ontario’s wholesale electricity market structure.
The program introduces new market mechanisms, pricing models, and scheduling processes that better reflect the physical realities of the electricity system and improve economic signals for market participants.
MRP modernizes Ontario’s market design to align with structures used in many other North American electricity markets.
The Market Renewal Program aims to:
MRP introduces several significant changes to Ontario’s electricity market structure.
A Day-Ahead Market (DAM) allows electricity to be scheduled one day in advance.
Market participants can submit bids and offers for electricity supply and demand for each hour of the following day.
Benefits include:
MRP introduces Locational Marginal Pricing, which reflects the cost of supplying electricity at specific locations on the transmission network.
LMP includes three components:
This approach allows electricity prices to reflect transmission constraints and grid conditions more accurately.
MRP introduces improved unit commitment processes, which determine which generators must be started in advance to meet expected electricity demand.
These changes improve:
Under the current market design, congestion is often managed through settlement mechanisms such as Congestion Management Settlement Credits (CMSC).
MRP reduces reliance on these payments by allowing market prices to directly reflect congestion through locational pricing.
MRP improves how electricity supply and demand are scheduled by incorporating more accurate system modeling, including transmission constraints.
This leads to:
The Market Renewal Program has been developed over several years.
Key milestones include:
| Year | Milestone |
|---|---|
| 2016 | Initial market renewal design work begins |
| 2018 | Detailed market design proposals published |
| 2020 | Market rule development and stakeholder consultations |
| 2023 | Final market design approved |
| 2025 | Planned implementation of renewed market structure |
The implementation process involves significant updates to market systems, rules, and operational procedures.
MRP affects many types of electricity market participants, including:
Participants must adapt to new pricing signals, bidding structures, and market rules.
Under the previous market structure, electricity prices might be the same across the province even when transmission congestion exists.
Under the Market Renewal Program, prices may differ between locations because the cost of delivering electricity to those locations is reflected in the market price.
Ontario’s electricity market was originally designed in the early 2000s.
Since then, the electricity system has evolved significantly, including:
Market renewal updates the market design to better reflect modern electricity system conditions.
Last Updated: YYYY-MM-DD