Ontario Energy Procurement Update: Minister of Energy Directs 4000MW Procurement

Ontario’s Minister of Energy issued a directive to accept recommendations from the Independent Electricity System Operator’s (IESO) interim “Pathways to Decarbonization” report. This move confirms eligibility for gas-fired generation and non-emitting resources in the upcoming Long-Term 1 RFP, the Expedited RFP and the Upgrades Solicitation. In following with the recommendations of the IESO report, the Minister of Energy confirmed the need for incremental gas resources to ensure reliability, affordability and sustainability for Ontario electricity consumers.

This directive represents 4000 MW of new capacity in Ontario to reach commercial operation by 2026. The following allocations and thresholds have been identified:

• Maximum 1500MW: gas fired generation (contracts to 2040 for expansions; 2035 for upgrades)
• Minimum 1500MW: of standalone energy storage (all technologies)
• Incremental 1000MW: of non-emitting resources (including storage)

This represents the single largest procurement for energy resources in Canada at a time where supply scarcity is similarly becoming an issue across neighbouring jurisdictions. The IESO is now formally tasked with executing on the first round of procurements.