Grid Innovation in Local Energy Markets Electricity Distributors Association

Grid Innovation in Local Energy Markets

Simulating A Market Platform for Energy Services

  • 1 November 2021
  • Author: Sari Maritzer
  • Number of views: 2539
Grid Innovation in Local Energy Markets

By Blaine Osmond, Communications Coordinator, NT Power

Climate change combined with aging infrastructure and the need for new supply is driving innovation across the sector. One such example is a collaboration involving Newmarket-Tay Power Distribution Ltd. (NT Power), Elexicon Energy, Powerconsumer and Norway-based NODES initiative. The partners are working together to estimate the potential for local energy markets to deliver more affordable, reliable, resilient and environmentally sustainable electricity systems in local communities.

“Jurisdictions around the world are looking at how to integrate distributed energy resources to create stronger, more sustainable electricity systems,” said Falguni Shah, Vice President Technology and Innovation, Elexicon Energy. “Elexicon Energy is looking forward to working with our partners to identify exactly how local distribution companies (LDCs) and these energy resources can support this evolution and unlock the value these technologies can potentially provide to all stakeholders.”

With financial support from the Ontario Independent Electricity System Operator (IESO) Grid Innovation Fund, the project will simulate how distribution system operators of the future can integrate local energy resources to reduce costs to customers, improve the reliability and resilience of the distribution system, and lead to more sustainable outcomes in the communities they serve.

“Our forecasts show that electricity demand is expected to increase this decade across the province, resulting in a need for new supply,” said Katherine Sparkes, Director, Innovation, Research & Development, IESO. “This local electricity market simulation will show how we can tap into the existing capabilities of businesses and communities to help keep our electricity grid reliable this decade, while also providing them with revenue opportunities.”

The initiative builds on work that Newmarket began in 2018 to integrate customers’ requirements into the distribution system plan. At that time, NT Power was exploring alternative business models to co-invest and transact with its customers’ behind-the-meter energy resources as a cost-effective alternative to overhead wires and poles.

The initial context for the 2018 work was a study NT Power commissioned on the Future Climate from 2040 to 2049 to get some key risk and resilience recommendations. That report highlighted the increasing risks to overhead pole lines, and the communities they serve in Ontario, because of the effects of climate change:

  • 22 per cent less snow – 86 per cent more rain
  • 13 per cent more precipitation overall
  • One-day maximum rainfall up 52 per cent
  • 35 per cent increase in intense rainstorms (>50mm)
  • 39 per cent increase in winter storms
  • More shoulder days per year – spring/fall – transitions between winter and summer

Increased periods of temperatures between -2°C and +2°C will prolong and extend conditions for freezing rain and ice storms. It is not just the electrical system that is at risk. From a planning perspective, this project aims to bring focus to what needs to be done in the 2025-to-2040 timeframe——to deal with upcoming issues. 

The work completed in Newmarket achieved the goodwill and engagement needed to work directly with customers to design, test, and develop a business model and software platform to operate, clear and settle a local energy market in real time.

“NT Power is looking forward to working with our partners to understand how to evolve the distributed energy grid. We believe that LDCs will play an integral role in establishing viable local energy markets. This project will be a first step in understanding what that future may look like,” said Ysni Semsedini, President and CEO, NT Power.

The current Local Energy Market Grid Innovation Fund project (“LEM project”) builds on what was learned in Newmarket and extends the concept to the idea of a local energy market operating within a distribution system at the level of the whole town or city, but at voltage levels below the transmission grid, and transparent to the bulk energy system and the operations of the markets administered by the IESO.

An advantage of working from the customer meter up, instead of the other way around, is that efficiencies and cost-effective opportunities for investment are greatest at the point of delivery. A kilowatt saved there saves all the upstream infrastructure which would otherwise be needed to serve it. Avoided fuel costs, carbon emissions, and losses during peak energy periods alone offer reduced costs and improved outcomes for customers.

Initially, the project will focus on data collection and modelling, and specifying the use cases for simulation. Subsequent phases will address simulation design, grid services specification, market models and rules. It will also integrate software platforms developed by Powerconsumer and NODES to model how electricity customers and LDCs can work together to plan and invest for more connected, coordinated, and sustainable local energy systems.


About NT Power
NT Power is jointly owned by the Municipalities of Newmarket (93 per cent) and Tay (seven per cent) serving 50,000 customers in the areas of Newmarket, Tay and Midland. With a focus on safe and reliable service to our customers, NT Power’s strategic direction is to foster innovation and ultimately enable the communities it serves to become leading Electric Cities, achieving or exceeding net zero carbon emissions targets and climate change goals. @NTPowerNews