Edited on July 4, 2025
Day-Ahead and Real-Time Prices
The summer peak demand season has arrived – and peak prices along with it. There were 21 real-time Ontario Zonal Price (OZP) spikes greater than $200/MWh, with the highest price hitting $1,229.23/MWh. Of these 21 real-time price spikes, 18 occurred in the first two days of the week – in line with the hottest and highest demand days of the week. Most of the largest price spikes in real-time happened either in morning hours or afternoon-to-early evening hours. The highest real-time price hour was at 4 PM on June 24th when Ontario demand was more than 24,600 MW. Note that Ontario peak demand passes 24,800 MW at 7 PM on the same day.
The real-time price spikes throughout the heat wave were a result of the combination of high demand and variances between forecasted versus real-time demand. The graph below shows divergences between day-ahead and real-time forecasted demand and peak demand for the two hottest days of the week – June 23 and June 24 – relative to the real-time OZP. In the highest priced hour, demand in real-time was significantly higher (more than 1,500 MWs) than forecasted demand in day-ahead. Under-forecasting real-time demand coupled with the high peak demand can result in high cost resources being dispatched to meet demand and handle ramping constraints.
Similar to last week’s review, there were no negative day-ahead or real-time prices. There were few hours where the real-time Ontario price moved from well below the day-ahead price to real-time spikes significantly above it. Most days of the week showed greater convergence between day-ahead and real-time prices than we have seen in previous weeks and since the renewed market launched in May.
OR Prices
Both real-time and day-ahead Operating Reserve (OR) prices remain elevated compared to historical averages. The average weekly day-ahead 10S price was $32.54/MW, while it was $73.24/MW in real-time. Again, this highlights that the supply stack in the OR market remains much tighter in the renewed market compared to the legacy market (as noted in previous commentaries). Both day-ahead and real-time 10S prices were significantly higher than last week. Real-time 10S prices continue to be much higher than day-ahead 10S prices. Compared to last week, OR prices in day-ahead were more volatile, with the highest price spike being $205.97/MW on the first day of the week, with prices settling down throughout the week once demand moderated.
The average OR price was below the average energy price for the week– in line with historical patterns. The exception was in the middle of the week (on June 26) during five hours where OR prices exceeded OZP. In the morning (8 AM), there was a $48.70/MW difference between the OR and OZP. Nonetheless, day-ahead OR prices generally more closely tracked energy prices.
Real-time OR prices were low for several hours of the week with OR prices exhibiting less volatility compared to energy prices. Compared to the previous week, real-time OR prices largely moved in tandem with real-time OZP.
Zonal Prices and Congestion
Similar to most weeks since the renewed market was launched, the Northwest and Northeast zones experienced the most congestion in day-ahead. Congestion in the Niagara zone was minor. The The Northwest zone had the most negative congestion on the first day of the week (one of the two hottest days), reaching -$110/MWh in the day-ahead market – at the same time that energy prices were spiking across the market in other zones.
Note that negative congestion typically means there was a constraint exporting energy from a particular zone, while positive congestion is the opposite. The Northwest and Northeast zones typically post negative congestion in the day-ahead market, as there is often more supply than demand and limited transmission to export it to the major load centres in southern Ontario.
Real-time zonal prices in the Northwest and Northeast remain extremely volatile. Both zones saw extreme negative congestion on the first two days (hottest days of the week) while energy prices were nearing the price ceiling ($2,000/MWh) in all of the southern zones.
And in real-time, the Niagara zone saw very positive congestion, whereas in the first seven weeks that zone posted moderate negative and positive congestion in a number of hours. Congestion reached $1,011.34/MWh coinciding with a real-time price spike hour.
