How does North America’s power market function?

How is North America’s power grid structured?

The power grid, which transmits electricity throughout Canada, USA and Mexico is divided into 7 synchronous power grids, and multiple remote areas supplied by local power generating plants through low-voltage lines. The North American Bulk Electric System (BES) was instated like this to minimize the risk of continent-wide power disturbances.

Each of the seven bulk power systems, also referred to as Interconnections, operates independently at a frequency of 60Hz. As the power phases are not synchronized between the Interconnections, power can only be flowed between them at designated converter stations. At these stations, power is converted to direct current and then back to alternating current to match the destination grid’s frequency and phase.

Who operates the North American power transmission?

The Canadian provinces of Nova Scotia, New Brunswick, Ontario, Manitoba, and Alberta are operated by Independent System Operators (ISO), locally known as Electric System Operators (ESO). The power grids in the northern areas of Canada, as well as the territories of Saskatchewan and British Columbia, are traditionally regulated. Here, the power is produced, owned, and distributed by the system operators via their own transmission systems. The supply here is mostly managed through long-term Power Purchase Agreements (PPA).

In the USA, seven Independent System Operators manage the power grid through bid-based markets. Two-thirds of the USA’s electricity load is served in these ISO regions. Similarly to Canada, there are three traditionally regulated regions, where power utilities are responsible for system management and operation, as well as delivery to retail customers. The Southeast, Southwest, and Northwest are traditionally regulated, which frequently entails that the power utilities own the transmission, generation, and distribution systems in the area.

In Mexico, apart from the Northernmost parts of the Baja Mountains, one independent system and market operator manages the grid – Centro Nacional de Control de Energía (CENACE).

What are independent system operators (ISOs)? ?

Independent System Operators (ISOs) are the electric transmission system operators in the United States. They are independent, non-profit organizations responsible for coordinating, controlling, and monitoring the power grids within their operational areas. In Canada, the body that performs these functions is called an Electric System Operator (ESO). In Mexico, it is the Independent System and Market Operator (ISMO).

You can read about the differences between American ISOs and European TSOs here.

What is the role of an independent system operator? ?

When were ISOs instated?

Which are the independent system operators in North America?

What are Regional Transmission Organizations (RTOs)?

What is the Federal Energy Regulatory Commission (FERC)?

What is the difference between ISOs and RTOs?

What is the North American Electric Reliability Corporation (NERC)?

How to enter North American wholesale power markets?

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Please note that this article was published on April 11th, 2024, and time-sensitive information in it may be outdated.