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

Author

Listed:
  • Bejamin Dachis

    (C.D. Howe Institute)

  • Donald N. Dewees

    (University of Toronto)

Abstract

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.

Suggested Citation

  • Bejamin Dachis & Donald N. Dewees, 2011. "Plugging into Savings: A New Incentive-Based Market Can Address Ontario’s Power-Surplus Problem," e-briefs 120, C.D. Howe Institute.
    • Handle: RePEc:cdh:ebrief:120
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    File URL: https://www.cdhowe.org/public-policy-research/power-glut-why-ontario-residents-pay-costly-electricity-they-don%E2%80%99t-need-and-what-do-about-it
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    Cited by:

    1. Donald N. Dewees, 2013. "The Economics of Renewable Electricity Policy in Ontario," Working Papers tecipa-478, University of Toronto, Department of Economics.

    More about this item

    Keywords

    Economic Growth and Innovation; Ontario; Canada; power supply;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K20 - Law and Economics - - Regulation and Business Law - - - General

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