IESO York Region Non-Wires Alternatives Demonstration Project

Alectra, in partnership with the Independent Electricity System Operator (IESO) and Natural Resources Canada (NRCan), delivered the IESO York Region Non-Wires Alternatives (NWA) Demonstration Project, North America’s first distribution-level local electricity market. The project tested the potential of distributed energy resources (DERs) to serve the region’s electricity needs and helped develop a better understanding of how to competitively procure and operate DERs. 

As part of the Demonstration Project, a variety of local DERs such as gas-fired resources, energy storage, and demand response resources were utilized during peak summer demand. Alectra, acting as the Distribution System Operator (DSO), facilitated third-party competition to secure and dispatch participating DERs. 

The Demonstration Project took place in selected York Region municipalities, including Vaughan, Markham and Richmond Hill in Ontario, Canada, where electricity demand is forecasted to outpace system capability within the next 10 years. 

Learnings from the York Region NWA Demonstration Project will be crucial in shaping Ontario’s future DER landscape for years to come and will aid towards building a modernized and decarbonized grid.

Project Objectives
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The IESO York Region Non-Wires Alternatives (NWA) Demonstration Project allows commercial and industrial facilities to leverage on-site energy resources to earn revenue while helping power local communities. Doing so will help us understand how local DERs can meet local, regional, and province-wide electricity needs. 

Project objectives included, but were not limited to: 

  • Exploring the use of auctions to secure local capacity, energy and reserve services 
  • Assessing the interest and ability of different DERs to compete to provide capacity, 
  • Effectively procure capacity, energy and reserve services 
  • Driving community engagement and development by enabling local solutions 
  • Assessing the unique operational and reliability characteristics of DERs as compared to traditional transmission and distribution infrastructure.
Project Highlights
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The Demonstration Project took place over 2 commitment periods (two summer seasons) and included 15 activation events in total. These events reduced local peak demand by 8 MW on average and delivered 367 MWh back to the grid. 

Metrics - Year 1 : Commitment Period from May – October 2021

9 Activations 

On the hottest days of summer

7.8 MW 

Average reduction in local peak demand

~200MWH 

Energy delivered back to the grid

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Metrics - Year 2 : Commitment Period from May – October 2022

6 Activations 

On the hottest days of summer

8.1 MW 

Average reduction in local peak demand

~167MWH 

Energy delivered back to the grid

Other Highlights
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First in Canada: The project achieved a “Canada first” in the fall of 2020 with the local capacity auction procuring a total of 10 MW of capacity from a variety of resources. These resources were procured with a clearing price of $0.64/kW-day. The procured resources committed to being available for a six-month summer period (from May 2021 to October 2021) to support the grid during demand peaks by either generating electricity for the grid, or by reducing their consumption on demand. 

In June 2021 the project achieved another first, when participant DERs were activated during a heatwave to help reduce local demand (4.5 MW on June 7, 2021, and 3.6MW on June 28, 2021). This was the first time in Canada that DERs secured through a local capacity auction were used to help reduce local peak demand.

YEAR 2 of the Project (2021-2022)

Meet the 2021 Participants
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Successful Year 2 participants and commitment of energy capacity is as follows:

York Region Participant

Local Capacity Obligation (kW)

Sobeys Capital Inc.*

Demand Power Group Inc.

EnergyHub Canada ULC

Markham District Energy Inc.*

Enel X Canada Ltd.

Rodan Energy Solutions Inc.

GC Project LP*

Longo Brothers Fruit Markets Inc.*

Tycho Poly Inc.

Demonstration Total

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*A DER is considered "Reserve-Capable" if it is capable of delivering or reducing its energy within 30 minutes of receiving a notice.

Revenue Potential for Participants
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Up to $170,000 per MW* for the duration of the Commitment Period, subject to local auction clearing prices. 

Participants earn revenue from both a monthly availability payment (in return for agreeing to commit their energy capacity) and by participating in Local Energy Auctions and Local Reserve Auctions in the case of reserve-capable DERs, over the 6-month summer Commitment Period. In events of contingency, resources that are reserve-capable will be paid the local reserve payment if/when their reserve-capable DER is deployed. Participants that successfully complete test activations for energy and test deployments in the case of reserve-capable DERs, will be paid a test activation payment and/or test deployment payment as well.

*Estimate based on last year’s capacity price of $0.64/kW-day and assumes the max energy price of $2/kWh, for 5 activation events of 4 hours each, and 1 test activation during the Commitment Period (May 1 to Oct 31, 2021). The estimate also assumes 5 reserve events, 2 reserve deployment events and 1 reserve test deployment. The estimate is for informational purposes and the earnings in the demonstration will depend on the results of the auctions and the performance of the DERs.

Milestones & Requirements
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The table below outlines the main milestones and requirements of the 2021 Auction and 2022 Commitment Period.

Initial Registration Period

Registration Window

Aug 25 – Sep 22, 2021

Registration Requirements

Register the organization and DERs available for participation.

NEW! Reserve-Capable DERs: Eligible Direct DERs and Aggregator DERs may provide Reserve and participate as a Reserve-Capable DER.

Local Capacity Auction

Auction Deposit

Oct 6, 2021
Equal to $2/kW multiplied by the eligible DER capacity.

Offer Window

Oct 20-21, 2021

Submit your capacity offer for each Eligible DER (Quantity offered cannot exceed eligible capacity. Price must stay within maximum capacity price).

Forward Period

Contract Execution

Nov 3, 2021 – Nov 30, 2021
Return your signed contract by November 30th. 

Supplemental Registration

Finalize registration of DER(s) by March 31, 2022. Full details required at this stage.

Bid/Offer Settings

You can start setting up your daily/hourly energy Bids/Offers as of April 14, 2022, in preparation for the Local Energy Auctions and Local Reserve Auctions starting on May 1, 2022.

Commitment Period, Local Energy Auction

Commitment Period

May 1 – Oct 31, 2022

Availability Window

12:00 – 21:00 EDT, Business Days

Notifications

  • Standby Notice provided by 07:00 EDT
  • Activation Notice provided no later than two (2) hours in advance of an Activation
  • Reserve Notice to be issued no later than two (2) hours ahead of the first Reserve Hour 
  • Deployment Notice provided 30 minutes before a Reserve Hour
  • Test Standby Notice provided a day ahead of the Test Activation day
  • Test Activation Notice provided no later than two (2) hours ahead of the first Activation Hour of the Test Activation

Number of Activations or Reserve Deployments

A maximum of ten (10) events

Activation Length

Up to 4 hours

Customer Journey Map
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Take a look at the Non-Wires Alternatives Demonstration Project steps, as well as the associated timing for each.

FAQs
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Find Frequently Asked Questions about the project here.

YEAR 1 of the Project (2020-2021)

Overview
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For the purposes of this demonstration, eligible resources include demand response, battery storage and thermal resources, with available capacity ranging from 100kW to 3,000kW, available for 4 consecutive hours. Participants can take part in the project directly or through an aggregator, including commercial, institutional or residential resources.

NWA Icons

Meet the 2020 Participants
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Successful participants and commitment of energy capacity is as follows:

York Region Participant

 Local Capacity Obligation (kW)

 Edgecom Energy Inc.

Markham District Energy Inc.

EnergyHub Canada ULC

 Longo Brothers Fruit Markets Inc.

GC Project LP

Tycho Poly Inc.

NRG Curtailment Solutions Canada, Inc.

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“This new program has made our participation as an aggregator much easier and will allow for more participants to supply electricity resources into the grid in the future,” said Behdad Bahrami, Founder/CEO, Edgecom Energy. “The NWA pilot is an all-around win for competitiveness in Ontario and we are excited to help our clients provide their DERs into the Alectra grid.”

“We are thrilled to be part of this new local market,” said Atal Walia, Director of Operations at Tycho Poly Inc. “It gives us the opportunity to bring forward a new revenue stream and help manage growing local energy needs.”

Milestones & Requirements
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The table below outlines the main milestones and requirements of the 2020 Auction and 2021 Commitment Period.

Initial Registration Period

Window

Sept. 23 – Oct. 28, 2020

Registration Requirements

Register the organization and DERs available for participation.

Local Capacity Auction

Auction Deposit

Nov. 10, 2020
Equal to $2/kW multiplied by the eligible DER capacity.

Offer Window

Nov. 18-19, 2020
Submit your capacity offer for each eligible DER.  (Quantity offered cannot exceed eligible capacity.  Price must stay within maximum capacity price).

Forward Period

Contract Execution

Dec. 2, 2020 – Jan. 6, 2021
Return your signed contract by Jan. 6th. 

Supplemental Registration

Finalize registration of DER(s) by March 31, 2021.  Full details required at this stage.

Bid/Offer Settings

You can start setting up your daily/hourly energy bid/offer as of April 14, 2021, in preparation for the energy auction starting May 1.

Commitment Period, Local Energy Auction

Commitment Period

May 1 – Oct. 31, 2021

 Commitment Hours

07:00 – 21:00 EST, Mon-Fri.

Activation Notification

"Standby Notice" warning provided prior to 07:00 EST, dispatch activation notice provided no later than 2 hours in advance of activation. Test activations will receive a 1-day notice. 

Number of Activations

Up to 10 activations and 2 test activations.

Activation Length

Up to 4 hours

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Benefits of a local energy market

Bill with credit card in hand

New revenue opportunity for businesses and consumers.

Mobile with message

Real-time energy auction, bringing forward competitive, affordable energy alternatives.

Boosting graph

Reduced system constraints leading to immediate grid supply

Earth with plug-in cable around it

Aging technology replaced with clean resources

NWA Pilot - Impact and Learnings

Learnings from the York Region NWA Demonstration project will be crucial in shaping Ontario’s future DER landscape for years to come and will aid towards building a modernized and decarbonized grid.

Project Evaluation Report

Project Evaluation Presentation 

Participant testimonials
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“This new program has made our participation as an aggregator much easier and will allow for more participants to supply electricity resources into the grid in the future,” Behdad Bahrami, Founder/CEO, Edgecom Energy. 

“We are thrilled to be part of this new local market. It gives us the opportunity to bring forward a new revenue stream and help manage growing local energy needs.” Atal Walia, Director of Operations at Tycho Poly Inc.

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