Ontario's IESO starts its November capacity auction with batteries in the mix
Serguey Asael Shinder2 min readOntario's Independent Electricity System Operator has opened its annual capacity auction, in which batteries compete with generators, imports and demand response for six-month commitments to be available when the grid needs them. Qualification requests were due by 25 September, pv magazine reported the day before. IESO then assigns each resource a qualified capacity and an auction deposit, and resources that post the deposit can bid in November up to their qualified amount.
The timetable runs well ahead. Offers will be accepted on 25 and 26 November for two obligation periods: summer 2027, from 1 May to 31 October, and winter 2027-28, from 1 November 2027 to 30 April 2028. Last year's auction secured 1,833 MW for summer 2026 and 1,125 MW for winter 2026-27, and IESO said in December that the total cost of that capacity would represent about 1% of system costs.
IESO describes the auction as a short-term balancing tool for existing and uncommitted resources, separate from the long-term contracts it uses to buy new capacity. Those have been dominated by storage: the LT1 procurement secured 1,784 MW of batteries across ten facilities, the expedited E-LT1 round about 882 MW, and in June the first capacity window of LT2 selected three eight-hour battery projects with 640 MW.
What it means
Ontario runs two capacity markets for two different jobs. Long-term contracts pay for new plant to be built; the annual auction tops up the system with whatever existing or flexible resources can commit for the next season. A battery can play in both: contracted capacity underwrites its construction, and any uncommitted capability can earn in the short-term auction.
The cost figure puts the auction in proportion. At about 1% of system costs, it is a small instrument relative to the long-term contracts, and it works as a price signal for what near-term reliability is worth rather than as a funding source for new projects. For developers the useful reading is the gap between the two: long-term procurements are where the money for new storage comes from, while the auction shows how much existing capacity the system is short season by season. The results in December will show whether the growing contracted battery fleet reduces that shortfall.