The Results of Canada’s Largest Battery Storage Procurement are In

Overview

The Independent Electricity System Operator (IESO) released the Long-Term 1 (LT1) procurement results earlier today. LT1 secured a total 2,195 megawatts (MW) of maximum contract capacity illustrating another step forward in the implementation of the Ford Government’s Powering Ontario's Growth Plan and greater assurance that the province will continue to have access to clean, reliable and affordable electricity for the remainder of this decade.

As storage facilities typically charge during off-peak hours and inject energy back into the grid when Ontario needs it the most, the successful projects awarded contracts in the LT1 procurement will help provide the necessary flexibility Ontario needs in order to keep our electricity grid balanced during peak times.  

In addition to the 10 storage facilities announced today, the IESO also announced 3 non-storage facilities that will provide a total capacity of 410.69 MW to the grid. These facilities will also help provide the electricity system with energy and capacity to meet the growing needs that have been forecast by the IESO later in this decade.

A Breakdown of the Results

The IESO’s LT1 procurement, when combined with Expedited LT1 and the Oneida Battery Storage Facility, totals 26 facilities with a total capacity of 2,915 MW.

Included within the total 2,915 MW, the 10 clean energy storage projects announced today will secure 1,784 MW and will range in size from 9 MW to 390 MW. Nine of the ten BESS facilities also had 50 percent or more equity participation from local Indigenous nations, supporting an important policy objective for the Government.

The 3 non-storage facilities announced today will provide a total capacity of 410.69 MW to the grid, the largest being the expansion of the Napanee Generating Station at 405 MW.  

The IESO also announced $672.32 as the storage category weighted average price for the 10 projects, and $1,681.14 for the non-storage category. Importantly for ratepayers, this was a 24 per cent decrease in price for storage facilities compared to last years Expedited LT1 procurement.

To view the full list of successful proponents click here.  ‍

Meeting Ontario’s Ongoing Electricity System Needs

As the IESO’s 2024 Annual Planning Outlook (APO) has forecasted an average annual demand growth rate of 1.9% with capacity needs growing from more than 2000 MW in 2029 to about 5300 MW in 2034, the successful projects in the IESO’s latest round of procurements are a positive step towards meeting those needs. It is also a testament to the progress being made through the implementation of the Powering Ontario’s Growth Plan and the government’s commitment to ensuring Ontario is able to maintain a clean and reliable grid.

However, this is only one part of the solution for meeting Ontario’s growing electricity needs. The IESO has also announced the Long Term 2 (LT2) RFP, and has begun engagement on the procurement design considerations.

The LT2 procurement will include:

• a 2000 MW energy stream target for resources, like wind, solar, and hydroelectric generation to be in service by 2030.

• a 500-1000 MW long lead time assets target for hydroelectric and long duration energy storage resources to be in-service by the early to mid-2030s.

The IESO also confirmed earlier today a new capacity stream target of 500-1000 MW for storage, hydrogen and possibly biofuels to be in service by 2031.

Sussex anticipates the procurement design and rules to evolve throughout this year with bids expected in 2025. We also expect further clarity in the coming month on government policy decisions related to land use, procurement timing, and transmission build-out that could still impact critical procurement design factors.

The next IESO LT2 engagement webinar will be on May 23. Sussex consultants will be following along with additional updates and developments should your company have any questions.