After slogging its way through a controversial plan to get new gas-fired power plants online, Ontario is stepping back into renewable energy procurement with calls for 5,000 megawatts of new non-emitting wind, solar, hydropower, or bioenergy capacity over the next decade, the province’s Independent Electricity System Operator (IESO) announced this week.
The province will be looking for 2,000 MW to go online by 2030, and subsequent procurements will call for another 1,500 MW in 2032, then 1,500 MW more in 2034, the IESO says [pdf] in a backgrounder accompanying a December 11 media release. The initial procurement will combine contract renewals with existing renewable energy facilities as well as new construction, the Toronto Star reports.
“This staged approach for acquiring new supply will allow for a regular reassessment of needs as time progresses, and for ongoing technological advances to occur that may reduce associated costs,” the backgrounder states. The initial wave of procurement “will also represent the first time that small-scale electricity generation and storage devices smaller than 1 MW will be eligible to participate in the IESO procurement process.”
Communities Are Asking
The 2,000 MW in the first procurement will equal about 5% of Ontario’s electricity demand, and Energy Minister Todd Smith said the announcement is generating local interest, the Star writes.
“Many communities have already reached out to me to share their interest in hosting new energy projects,” Smith told the Empire Club in Toronto. “(They) can start working with proponents today to ensure that projects can be built that are going to bring new opportunities, they’re going to bring new jobs to their communities, and they’re going to contribute to the province’s electricity grid at the same time.”
The new renewable energy capacity is meant to connect to the 3,000 MW of energy storage the IESO plans to have online by 2028, after launching what it announced as Canada’s largest-ever battery procurement in July. Over the shorter term, The Energy Mix revealed at the time, those batteries will likely be powered by high-emitting gas plants.
In this week’s release, the IESO presented the new renewables procurement as a next step in meeting the province’s energy needs. “With new supply on track to meet demand mid-decade, we are now addressing energy needs going into the 2030s and beyond,” President and CEO Lesley Gallinger said in the release. “The next round of procurements will be a perfect complement to our storage fleet—generating energy to charge recently procured batteries that can be deployed when needed to meet system needs.”
Chuck Farmer, the IESO’s vice-president of planning, conservation and resource adequacy, said the grid operator may be looking at a longer series of power purchases. “My view of the non-emitting procurements is that we don’t need one, we need to move into a steady rotation of them,” he told the Globe and Mail. “And that will send a signal to developers that they should start to really to look at their opportunities in Ontario.”
In a recent report to Smith, the IESO said “current average benchmark prices” for wind have fallen by more than half since the mid-2000s, BNN Bloomberg writes.
End of a ‘Hiatus’
The announcement ends a 5½-year “hiatus” on renewables construction in Ontario that began when the Doug Ford government took office in 2018, after “railing against renewables for being expensive and driving up hydro bills,” the Star recalls. After that election, the province cancelled 758 signed contracts for smaller renewable energy projects, many of them in Indigenous communities, and ripped a finished wind farm out of the ground in Prince Edward County, in Smith’s home constituency.
The province insisted the cancellations would cost taxpayers nothing. But in November, 2019, the NDP opposition at Queen’s Park demanded an audit after documents showed the government setting aside C$231 million to cover costs.
Against that historical backdrop, “the willingness to procure any new wind or solar power at all marks a significant shift for Ontario’s Progressive Conservative government, which must provide directives to the IESO for procurements to proceed,” writes Globe climate policy columnist Adam Radwanski.
“The symbolic impact of the planned investment may be greater than that, given the province’s recent history,” Radwanski adds. “And it could have a much bigger impact on the future shape of Ontario’s grid than the numbers suggest, by paving the way for further renewables build-out if this round overcomes myriad political and structural obstacles, including local opposition to projects and strained transmission capacity.”
An ‘Overdue’ Procurement
But by now, the province has lost ground to make up. “Ontario’s clean energy has become increasingly carbon-intensive, dropping from 94% non-emitting to 89%, and eroding the province’s competitive advantage in attracting businesses looking for low-carbon electricity,” the Star writes. “Renewable energy has also gotten cheaper, with solar now the cheapest form of energy in history.”
“The procurement of additional renewables is definitely overdue,” Evan Pivnick, clean energy program manager at Clean Energy Canada, told the Star. “With the cost reductions we’ve seen in renewables, there’s never been a time when the business case for these stands up more so than today.”
“Clean electricity is absolutely integral to efforts to decarbonize the economy and fight climate change. And it is a competitive advantage for the province,” agreed Keith Brooks, programs director at Environmental Defence Canada. “It’s good to see Ontario working to bolster, rather than undermine, the province’s ‘Clean Energy Advantage’.”
In a release, Brooks said Environmental Defence, a frequent, sharp critic of Ontario’s climate and energy policies, “is committed to engaging with the IESO, and with municipalities and Ontarians more broadly, to work to find suitable sites for these renewable power projects and ensure that they find support from municipal governments and neighbours alike. Clean power projects can find local support, but the process of community engagement and details on how the benefits are shared need to be carefully considered.”
Brooks also urged Ontario to abandon its gas plant procurement, noting that the facilities will be more costly than wind power or ground-mounted solar. The gas plants “will come at great expense though they will be effectively shut down in 2035, just seven years after they are to come online, due to the forthcoming federal Clean Electricity Regulations,” he said. “Ontario ratepayers will save billions of dollars if the IESO shelves this procurement now, before offering any more contracts.”
Eric Muller, Ontario director of the Canadian Renewable Energy Association, welcomed the IESO announcement as a “clear signal to our members that Ontario is ready for new renewable projects,” and a “significant opportunity for our members to develop low-cost wind, solar, and energy storage in Ontario to meet the province’s growing needs.”