Ontario energy planning is still missing its North Star

Ontario’s newly released energy strategy signals a growing openness to expanding the role of renewables, efficiency, and distributed resources. But one thing is missing: climate leadership. While framed as a clean energy plan, critics including RBC are calling out its lack of commitment to any short or long-term carbon target. If or when the province plans to phase out gas-fired generation remains a mystery.  

Businesses and cleantech industries need clarity and predictability, so they know where to locate and where to invest. The province could have seized this opportunity to send them a clear signal, that Ontario is capitalizing on its significant head start and fully committing to a net-zero target. Instead, the IESO continues to operate without a clear climate mandate, and Ontario’s clean energy advantage will diminish as gas-fired generation takes on a larger role. 

The report comes on the heels of major procurements of battery storage and gas-fired capacity, as well as announced plans to substantially increase Ontario’s nuclear capacity in the 2030s. 

The good news is wind and solar have finally made the cut. Given this government’s previous stance on renewables, it’s not insignificant. The plan highlights the key role of DERs in a future, modern grid, including consideration of an expanded role for community net metering. Removing the regulatory barriers to local generation will also make the benefits of renewables accessible to more residents and businesses. The province also commits to speeding up review of its long-term conservation and demand management (CDM) program, opening the door for energy efficiency to finally be evaluated on equal footing with supply-side solutions. 

Recognizing the significant energy storage capacity coming online in the next few years, the plan does commit to future procurements focused on energy rather than capacity, which will finally allow renewables to compete.

Yet despite these promising developments, the province continues to cite outdated data on the costs of solar and wind at 50.2 and 15.4 cents per kilowatt-hour. A comprehensive study commissioned by Clean Energy Canada puts today’s cost of utility-scale solar and wind in Ontario at 8.3 and 5.0 cents, respectively, in line with assumptions underpinning the IESO’s own P2D report. Electricity systems planning is complex enough as it is without obfuscation.  

In the absence of a path to net zero, however, local powers have a more important role to play than ever.  

How cities and utilities can provide leadership 

Much of the GTHA is constrained by the transmission capacity coming into the region. Cities are relying on abundant, low-carbon electricity to decarbonize their buildings, vehicles, and industrial processes and meet their climate targets. The report specifically points to the City of Toronto, a bottle-necked region reliant on gas-fired generation until new transmission can be built.  

It’s unclear what viable options for new lines exist, if any (a future IESO report assessing options such as underwater or buried cables is promised). Scaling investments in energy efficiency and DERs, however, can defer (or even eliminate) the need for new transmission capacity and prevent emissions from increased local gas-fired generation from skyrocketing. There remains plenty of low-hanging fruit for cities to act upon while we wait for these decade-long plans to unfold. 

1. Pursue all cost-effective energy efficiency, with incentives that reflect the localized cost of new supply. Local Distribution Companies (LDCs) can take a leadership role in planning for and operationalizing CDM programs (as they’ve done in the past) that defer or eliminate the need for investments in new energy infrastructure while advocating for an ambitious provincial framework in the coming months. 
2. Unlock the flexibility offered by demand-responsive loads. Smart thermostats and chargers, combined with modern grid controls, can allow us to meet supply with flexible demand rather than the other way around. Smart planning and incentives as we electrify our homes and businesses can allow these devices to fill a role historically met by gas-fired generation. 
3. Blanket the city with solar panels and batteries. The system has a near-term need for energy during the summer peaks, a role in which distributed solar can shine. Jurisdictions with comparable climates, such as New York, are years ahead of Ontario but have demonstrated models that the province can draw from. Distributed generation can be supplemented with battery storage where viable, providing local grids with additional flexibility and resiliency. 

Forecasting is far from a perfect science and the best laid plans of system planners often go awry. Faced with wildly varying projections of consumer adoption, technology advancement, economic health, and climate, we have an imperative to secure the future reliability and affordability of our electricity system by removing some of those uncertainties today. Now is the time for cities and LDCs to lead by example and show what a modern, flexible grid can look like.