As the 20-year demand, resource and transmission outlook for Ontario's electricity system, the IESO’s Annual Planning Outlook makes a long-term assessment of the many factors that impact future system reliability, setting the stage for the IESO’s planning activities. The 2021 outlook is projecting a significant amount of both change and opportunity in the sector over the next two decades as the province’s supply mix begins to evolve and newer sources of electricity demand play a prominent role in driving future needs.  

Here are this year’s key findings: 

1. Ontario is entering a time of marked electricity demand growth

The IESO’s planning processes are identifying transmission and supply solutions for emerging growth in the industrial, mining and agricultural sectors, as well as major expansion in transportation electrification. All of these factors are leading to higher electricity demand than Ontario has seen in many years. 

Energy Demand

2. Future policy decisions and economic growth mean long-term demand has the potential to be much higher  

A high demand scenario forecast reflects factors, such as policy and industrial projects, that could increase demand for electricity dramatically in the coming decades. The IESO’s Resource Adequacy Framework was designed to support the ongoing evolution of the sector, acquiring capacity through flexible and competitive procurement mechanisms while maintaining Ontario’s electricity reliability at the lowest cost to consumers.

Energy Demand by Scenario

3. Capacity needs that previously emerged in summer months are now visible in winter

Positive economic indicators, agricultural growth and growing electrification are increasing the need for system capacity starting in 2023. The IESO’s 2021 Capacity Auction is securing resources for both summer and winter 2022/2023, and will continue to look for winter capacity for the foreseeable future.

Summer and Winter Capacity Surplus/Deficit

4. Growth is accelerating in parts of the province that will need transmission support or local supply  

The retirement of the Pickering nuclear facility, as well as Bruce and Darlington refurbishments, mean Toronto and areas east of the city are expected to account for the majority of Ontario’s needs starting mid-decade. Mining and industrial electrification are also creating pockets of demand throughout the province. The IESO works with municipalities and local businesses through its regional planning and community engagement activities to identify and develop the most cost-effective solutions to meet local needs. 

Summer Capacity Needs including Locational Requirements, without Continued Availability of Existing Resources

5. Ontario’s supply mix could look very different in coming years  

The IESO’s resource outlook shows the potential for considerable change through the 2020s and early 2030s due to the combined effect of nuclear retirements, refurbishment outages, and expiring contracts/commitments. Evolving carbon policy could also result in a lower than predicted availability of gas generation, while new technologies such as storage and demand response could take on greater prominence in the system.

Installed Capacity Without Reacquisition of Expired Contracts

6. Projected demand from electrification of transportation is expected to grow an average of 20 per cent a year

A shift to decarbonization in the transportation sector is resulting in commitments for a number of large transit electrification projects, government incentives for both industry and consumers, and an ongoing shift to EV offerings from auto makers. All of these elements are contributing to increasing projected demand for electricity that rises rapidly in the early 2030s. An upcoming in-depth analysis of electrification in Ontario will help the IESO ensure the province is prepared for the growing need.

Electric Vehicle Electricity Demand Forecast

7. Broader electrification means significant emissions reduction over the next two decades

Electrifying technologies across various sectors, particularly transportation, manufacturing and industry, could mean real progress in reducing overall provincial greenhouse gas emissions. Projections for just two elements of the APO’s electrification forecast – electric vehicles and a single steel plant furnace upgrade - estimate savings of more than 18 Mt by 2040. Though just a small piece of the broader decarbonization picture, this is more than enough to offset emissions from the electricity sector itself. Next year, the IESO will evaluate a moratorium on procurements of new natural gas generating stations in Ontario at the request of the Ministry of Energy, and develop a pathway to zero emissions in the electricity sector.

Electricity Sector Greenhouse Gas Emissions, Historical and Forecast