IESO Publishes Ontario’s 2024 Annual Planning Outlook

Yesterday, the Independent Electricity System Operator (IESO) released the 2024 Annual Planning Outlook (APO). The updated APO is the fifth such report released by the IESO since January 2020, however for the first time provides a 25-year view on forecast system needs (2025-2050), as well as integrates the former Annual Acquisition Report (AAR) into the APO document. Likewise, several notable events have occurred since the last APO was published in December 2022 which need to be taken into account, including the release of Powering Ontario’s Growth, the Report of the Electrification and Energy Transition Panel (EETP), the IESO’s submission and subsequent response to the Government of Canada’s Draft Clean Electricity Regulations (CER), and the launch of several clean energy procurements to address needs identified in previous forecasts.

There has also been significant movement on the province’s consideration of new and refurbished nuclear capacity within the forecast timeframe. As such, the updated APO compares its reference “As Is Case” against a “High Nuclear Case” which accounts for the refurbishment of the four Pickering B reactors and the availability of four additional units at the Bruce Power site, referred to as Bruce C. While the impacts of the measures considered in the High Nuclear Case do not become material until the 2030’s, they would serve to reduce the otherwise forecast potential energy requirement in 2040 by approximately 28 TWh and summer capacity deficit by 3,200 MW.

There are notable uncertainties and risks to manage over the coming years, some quite significant such as the prescribed role of natural gas generation pursuant to a finalized CER, procurement success and timelines for practically bringing new projects online, climate risks and the resiliency of the system to associated extreme weather events, pace of electrification across various sectors, and policy/regulatory uncertainty inherent in long-lead infrastructure such as nuclear, hydroelectric, and long-duration energy storage (LDES) development.

Overall, the IESO is relying on a cadenced approach to medium and long-term procurements, supported by greater certainty around the availability of increased nuclear supply beyond 2030, significant transmission expansion, and the ongoing availability of existing resources to meet Ontario’s needs. Nevertheless, it is expected that Ontario will function below its Northeast Power Coordinating Council (NPCC) reserve margin requirement for at least the next five years.

Read the full analysis here.