Ontario launches competitive energy procurement

The Ontario government is set to launch its largest-ever competitive energy procurement, aiming to secure up to 5,000 megawatts (MW) of energy. The move is designed to provide affordable electricity and address the increasing demand for clean and dependable energy sources.

The plan includes a diverse mix of energy sources, including nuclear, hydroelectric, renewables, natural gas, and biomass. This initiative, known as the Second Long-Term Procurement (LT2), will focus on planning future energy projects in communities that agree to them, and will prioritize the protection of prime agricultural land. Key elements of the plan include:

• Requiring energy project developers to receive municipal support resolutions to ensure local support and consent for new projects.
• Prohibiting all projects in specialty crop areas and ground-mounted solar in prime agricultural areas to prevent solar farms.
• Incentivizing projects located in northern Ontario and those which avoid prime agricultural areas, along with a plan to unlock Crown Lands for renewable energy.
• Incentivizing economic opportunities for projects with or by Indigenous communities on whose traditional territory the projects are proposed.
• Requiring Agricultural Impact Assessments for projects that are permitted on all prime agricultural areas.

“With energy demand growing rapidly, our government is stepping up by advancing our largest energy procurement in our history. Our ‘all-of-the-above’ energy resource approach will expand access to affordable electricity to families and businesses across Ontario while opposing the regressive carbon tax,” said Stephen Lecce, Minister of Energy and Electrification.

The Minister’s letter to the Independent Electricity System Operator (IESO) calls for a transparent and competitive procurement process, including considerations for wind and solar technologies. It also asks for options to speed up the procurement to meet increasing energy demands.

The IESO is expected to deliver a procurement design framework by September 20, 2024, with a goal to finalize energy procurements by February 28, 2026. This timeline aims to support significant investments and job creation across Ontario.

This procurement follows the government’s recent addition of nearly 3,000 MW in new battery storage projects. Lesley Gallinger, CEO of the IESO, noted the need for increased resources to meet growing demand and expressed readiness to act swiftly with the new framework.

The procurement is part of the Ontario government’s broader plan that includes significant investments in nuclear power, with key projects at Bruce Power and Darlington, as well as refurbishing the Pickering Nuclear Generation Station. New transmission infrastructure will be prioritized to support job creation in electric vehicle and clean steel manufacturing sectors. Additionally, the government will also launch new energy efficiency programs in January 2025.