#Shorts: Ontario's IESO Gears Up for Future Energy Landscape: Stakeholder Engagement and System Reliability Needs

In a landmark move, Ontario's Independent Electricity System Operator (IESO) recently convened its first stakeholder engagement session, drawing over 400 industry representatives. The primary focus of the session was to address the province's emerging system reliability needs and gather insights on the design of Ontario's energy procurement programs.

Resource Adequacy Framework: Balancing Supply and Demand

At the core of this initiative lies the implementation of a resource adequacy framework. This framework comprises a set of policies, rules, and mechanisms within the energy sector, aimed at ensuring a reliable and secure supply of electricity to meet consumer demands. Notably, jurisdictions like California, Texas, New York, and others have already adopted similar frameworks to effectively manage their reliability challenges.

Eligible Resources and System Reliability Needs: A Holistic Approach

Ontario's resource adequacy framework is technology-agnostic, encompassing wind, solar, hydro, and biofuels. The focus is on incorporating new resources and expanding existing facilities to diversify the energy mix.

Several factors contribute to the emerging system reliability needs in Ontario:

1. Pickering Nuclear Facility Retirement: The retirement of the Pickering nuclear facility poses a significant challenge to Ontario's energy landscape.
2. Demand Growth: Driven by population growth, immigration, and expanding industries, there's a notable increase in energy demand, including the burgeoning cannabis industry and the growing need for Electric Vehicle (EV) infrastructure, and critical mineral industries in northern Ontario.
3. Natural Gas Price Hikes: Escalating natural gas prices add complexity to the energy equation, necessitating strategic planning.

LT-RFP 2: Addressing the Emerging Energy Gap

The IESO has announced the launch of the LT-RFP 2 in 2024, with expected commercial operation by 2030. Collaborative efforts with stakeholders are underway to design future procurement strategies that align with the forecasted system needs. The goal is to address a projected 5 Terawatt-hours (TWh) demand in 2030, requiring 2 gigawatts (GW) of new installed capacity under LT2-RFP. A gap in capacity is anticipated in 2029, requiring an additional 2 GW online by 2030.

Looking ahead, LT 3 and LT 4 projects, totaling 1.5 GW, are on the horizon, driven by evolving energy needs. The overarching purpose is to double the supply, reflecting Ontario's commitment to meeting emergent reliability needs and ensuring a resilient and secure energy future.