IESO Publishes 2025 Annual Planning Outlook

On April 24, 2025, the Independent Electricity System Operator (IESO) released the 2025 Annual Planning Outlook (APO), marking another significant milestone in Ontario’s electricity sector planning. Building on the foundation first laid in the 2024 APO, and staying consistent with what was forecasted in the IESO’s Updated Demand Forecast in October 2024, the 2025 APO forecasts a 75% increase (262 TWh) in annual energy demand by 2050.

This increase is associated with growing industrial demand and places greater urgency on infrastructure planning and development to maintain the stability and reliability of Ontario’s electricity system.

Over the next 25 years, Ontario’s electricity system is expected to undergo a rapid transformation. As net annual energy demand is now projected to grow by approximately 15% from the IESO’s 2024 APO, varying factors that have been cited to contribute to the significant upward trend include the electrification of transportation, the movement towards industrial decarbonization and data centres.

Importantly, while many actions including the release of Powering Ontario’s Growth and the IESO’s most recent energy procurements begin to address the system needs identified in previous forecasts, in the 2025 APO, the IESO underscores the need for a great deal of additional investment and planning flexibility in order to maintain grid stability and reliability across the province.

This year’s APO continues to adopt a pragmatic and flexible planning framework, maintaining focus on managing uncertainties while setting out clear capacity and energy targets. Notably, external risks, such as the evolving Canada-U.S. trade relationship, are flagged for the first time as material factors that could impact demand forecasts. As the analysis that informs the outlook was completed prior to the evolving U.S. tariff threat to Canada, which materialized with the February 1, 2025, Executive Order, the IESO has confirmed that the impact of tariffs will be incorporated into its analysis for future planning cycles.

The APO also emphasizes the potential need to procure additional supply and capacity should electrification trends outpace current projections, which is consistent with messaging in the 2024 APO, and the IESO’s October 2024 Updated Demand Forecast.‍‍

The IESO’s 2025 Annual Planning Outlook outlines key challenges and opportunities as Ontario’s electricity system undergoes transformation. Read our full analysis for the insights here.