Ontario expands its largest ever energy procurement

Key Takeaways:

• Ontario has increased its largest competitive energy procurement target by 50%, from 5,000 MW to up to 7,500 MW, to meet rising energy demand projected to grow by 75% by 2050. This procurement aims to provide energy for approximately 1.6 million homes.
• The procurement process will be transparent, competitive, and technology-agnostic. It will also emphasize protecting agricultural areas, fostering Indigenous partnerships, and encouraging northern Ontario development. The government is exploring additional procurement options, such as long-duration energy storage and small-scale renewable projects.
• Ontario’s energy strategy integrates various elements, including advancing nuclear energy projects, building new transmission infrastructure, and expanding energy efficiency programs. This holistic approach is designed to meet future demand sustainably while maintaining affordability and supporting economic growth.

The Whole Story:

The Ontario government is expanding the largest competitive energy procurement in the province’s history by 50% to meet soaring energy demand.

The government announced it has increased the target for the procurement from 5,000 megawatts (MW) to up to 7,500 MW.

Since the procurement was first announced, Ontario’s Independent Electricity System Operator (IESO) has released an updated electricity demand forecast which now shows the province will need 75% more electricity by 2050, the equivalent of adding four and a half cities the size of Toronto to the grid. To meet this growing demand, the government directed IESO to begin the government’s Second Long-Term Procurement (LT2) and implement the increased procurement target.

“Our government is expanding what is already the largest competitive procurement in the province’s history as demand for electricity continues to grow,” said Stephen Lecce, Minister of Energy and Electrification. “This expanded procurement will deliver enough power for 1.6 million homes, which is critical as our population and economy continue to grow. Unlike the former government which allowed hydro rates to soar, we are keeping costs down by planning ahead and using competitive procurement.”

Ontario says the procurement process for LT2 will be “transparent, competitive, and technology-agnostic” to secure the lowest cost energy resources. The process will also endeavor to protect prime agricultural areas, promote Indigenous partnerships, and encourage development in northern Ontario.

Alongside the launch of the LT2 procurement, the government has asked the IESO to report back on options to run two additional procurements, including:

• Options for a procurement of long-lead energy resources, including hydro and long-duration energy storage, recognizing the benefits of these unique resources that require more time to design and build.
• Options for a program to re-contract existing and acquire new-build small-scale electricity generation, such as smaller solar installations, that connect directly to the province’s distribution system.

“Access to sufficient, sustainable, and affordable energy is not just vital to helping businesses grow, it’s also a key factor in attracting new businesses and investment,” said Jaipaul Massey-Singh, CEO, Brampton Board of Trade. “This announcement by the Ontario government will help our province continue to be a premier destination for industry and help our economy grow.”

Procuring new long-term energy generation is just one part of Ontario’s Affordable Energy Future, the government’s vision as it plans for rising energy demand, which includes:

• Energy Planning – Developing the province’s first integrated energy plan, including a broad range of energy resources, such as electricity, natural gas, and other fuels to ensure the province’s energy needs are met in a coordinated and long-term manner.
• Nuclear Energy – Advancing clean, reliable, and affordable nuclear power through pre-development work at Bruce Power on the province’s first large-scale nuclear build in 30 years, four small modular reactors at Darlington and supporting OPG’s plan for refurbishing the Pickering Nuclear Generation Station.
• New Transmission Infrastructure – Designating and prioritizing transmission lines in Southwestern, Northeastern and Eastern Ontario that will power job creators, including EV and EV battery manufacturing and clean steel production.
• Keeping Costs Down – Expanding energy efficiency programs which are helping families and businesses reduce electricity usage and save money on energy bills.