Ontario has fallen short in its bid to buy 1,500 megawatts of new gas-fired electricity, but says it still has enough new battery storage and gas capacity on order to avert a looming provincial power shortage.
The Independent Electricity System Operator (IESO) reported last week that has secured new power supply from 10 battery storage facilities and three natural gas and biogas facilities, which should meet the province’s needs until the 2030s.
The IESO originally said Ontario should secure 4,000 more megawatts of capacity in the system—enough to power the city of Toronto—as it faces surging electricity demand, The Canadian Press reports.
But in a statement citing IESO data, Environmental Defence Canada noted the regulator had been unable to procure the 1,500 megawatts of gas it was originally looking for. Although the IESO has offered contracts for 723.5 MW of new gas capacity in three communities, including 450 MW in the town of Napanee, and is expanding three existing plants for a total of 286.4 MW, EDC Programs Director Keith Brooks still declared a “win for Ontarians”, after Halton Hills, Thorold, and Loyalist Township turned down contract offers from the IESO.
The final numbers mean a shortfall of almost one-third compared to the new gas capacity Ontario said it needed to support future electricity demand.
Brooks urged the IESO to rethink the gas procurement altogether. “The IESO’s move to contract this new gas plant is at odds with Canada’s commitment to a net-zero grid by 2035,” he said. “While natural gas prices have skyrocketed in the last year and will remain volatile, wind and solar are now the cheapest form of new electricity generation and offer lower rates for the consumer.”
Energy Minister Todd Smith said new projects across the province such as three electric vehicle battery plants highlight the need to secure a steady supply of electricity, CP writes.
“We have now broken records once again by completing the largest battery storage procurement in Canadian history and securing the electricity generation we need to power the next major international investment, the new homes we are building, and industries as they grow and electrify,” he said in a statement.
Combined with a previous round of new generation, the IESO said Thursday’s announcement means the province will have enough electricity for the rest of this decade.
The new 20-year contracts are for electricity supply set to come online between 2026 and 2028.
They include 1,784 megawatts of battery storage projects, which can charge during off-peak hours and inject energy back into the grid when it’s needed, including a 390-megawatt battery storage system in eastern Ontario that the government says is expected to be the largest storage facility procured in Canadian history.
The new electricity supply will also, controversially, come from another 411 megawatts of natural gas and on-farm biogas generation, CP writes.
The IESO has said the amount of new natural gas Ontario needs in the next few years is expected to increase greenhouse-gas emissions by 2 to 4%. The grid operator maintains that much gas is needed for now to ensure reliability of the grid, even though its own consulting report in 2022 showed that distributed energy resources could deliver enough new supply to clear the province’s looming electricity shortfall without new gas plants.
In 2021, Ontario’s electricity system was 94% emissions free, but that is now down to 87%.
Green Party Leader Mike Schreiner said new contracts for polluting natural gas production make “absolutely no sense” when lower-cost wind and solar energy is available.
“It’s good that the government is finally starting to play catch-up in investing in battery storage so we can better utilize low-cost renewables,” he said.
“But here’s the bottom line: global investors are pouring hundreds of billions of dollars into wind and solar, because they’re the lowest cost sources of generation. They’re not putting money into expensive fossil gas plants like the Ford government is.”
In the wake of Ontario’s gas plant commitments, The Energy Mix reported in an exclusive last summer that the new battery capacity will likely by powered by high-emitting gas.
The IESO has said Ontario could fully eliminate natural gas generation in its electricity system by 2050, starting with a moratorium in 2027 then phasing out current production, CP writes. But while the energy minister has spoken positively about the prospect, he has not committed to it.
However, the government has said its next planned procurements are all for non-emitting sources of generation, including wind and solar.
This report by The Canadian Press was first published May 9, 2024.
