Ontario Government Launches Energy Procurement Initiative

Ontario is launching a new energy procurement initiative to address the province’s growing electricity needs. The Second Long-Term Procurement (LT2) aims to add up to 5,000 megawatts (MW) of energy by securing new projects, but only in communities that agree to host them.

To prevent interference with agricultural land, the plan prohibits energy projects in specialty crop areas and bans ground-mounted solar projects in prime agricultural zones. Northern Ontario will get a boost, with incentives for energy projects that avoid prime agricultural areas, while Crown Lands will be unlocked for renewable energy development. Indigenous communities could also benefit if projects are proposed on their traditional lands.

Developers will need to secure municipal support before moving ahead with projects, and any projects permitted in prime agricultural areas will require an Agricultural Impact Assessment.

The Independent Electricity System Operator (IESO) has been given the job of setting up a competitive framework for selecting projects. The procurement framework is due by September 20, 2024, with final selections expected by February 28, 2026. This initiative follows the government’s recent approval of 3,000 MW of new battery storage projects. Ontario’s electricity demand is forecasted to surge by 60% by 2050, driven by factors like population growth, industrial expansion, and the rise of electric vehicles.