ON: New generation and storage capacity needed to meet province’s growing electricity demand

Ontario’s Independent Electricity System Operator (IESO) released a series of reports at the end of January on its long-term outlook to meet future demand while working to decarbonize the electricity grid. 

In the first report, Pathways to Decarbonization, IESO provides two scenarios for the province’s path to zero emissions. Under the Moratorium scenario, for at least the near term, natural gas is still needed. A moratorium on new gas generation could begin in 2027, if sufficient non-emitting supply were to be in place to meet growing electricity demand. By 2035, the system could also be less reliant on the natural gas fleet, lowering emissions by 60% below the IESO’s original forecasts. The cost to reach this scenario: $26 billion in programs and new infrastructure.

The Pathways scenario provides a zero-emissions electricity grid ‘reliably and cost-effectively’. It adds 65,000 MW of new supply including solar, wind, hydro, storage and nuclear, almost triple the amount of non-emitting resources from 2021. This includes an assumption that 15,000 MW of hydrogen could be available to replace natural gas generation. It estimates that $375-$425 billion will be required to effectively double the size of the system.

Read the report in full                  Read the backgrounder

In the second report, 2022 Annual Planning Outlook, IESO looks at the demand for electricity use in Ontario over the next 20 years. 

Some key takeaways:

• Demand for electricity is ‘trending up’, with the IESO forecasting an annual demand increase of about 2%.
• Increase in demand, coupled with less available supply, underscores the importance of securing new generation and storage capacity by the mid-2020s.
• More overall energy production will be needed by the end of the decade. This requires a broader range of supply options as well as supporting the development of new transmission infrastructure.

Read the report in full                  Read the backgrounder

It should be noted that at a stakeholder meeting held last month, IESO acknowledged that the future demand is hard to predict and its scenarios will require updates as time passes. IESO also told stakeholders that the reasons for Ontario’s growing demand for electricity include:

• Build out of transit fleets
• Industrial and mining growth
  • Two large battery facilities for the auto sector will create increased demand (Trudeau announces deal to build $1.5B electric vehicle battery plant in Ontario)
  • Two “green steel” companies (Ontario invests in green steel technology in Hamilton)
• Electric vehicle charging
• Decommissioning and refurbishment of nuclear power plants 

From the CPA perspective, the reports represent projections that are dependent on assumptions and come with significant costs, into the billions of dollars. All of this points to the importance of an all-hands-on-deck approach to achieving a low-carbon future while maintaining and enhancing the energy choice that propane offers, especially for those in rural and remote Ontario that do not have access to the natural gas grid and for whom electricity is an expensive option.