Plugging into Savings: A New Incentive-Based Market Can Address Ontario’s Power-Surplus Problem

After years of looming power shortages, Ontario faces instead a periodic problem of excess electricity supply at the same time that new generation capacity is being added. Since Ontario government agencies that purchase power have long-term, fixed-price contracts with many electricity generators, Ontario consumers pay for electricity produced by some generators even when that electricity has little value, particularly during periods of high wind production and low demand.For the long term, the province should create financial incentives for constructing flexible generation capacity.