Ontario shouldn’t backtrack on its commitment to non-emitting electricity

Last week, the Minister of Energy and Electrification sent a letter to the IESO, directing a report-back on its Long-Term Procurement process (LT2). The letter effectively reversed the government’s commitment to focusing future procurements on non-emitting generation by opening up LT2 to gas plants.  

TAF and many other players in the energy sector championed the government when they committed to non-emitting resources (for example, wind, solar, and storage) in their next round of procurement. The sudden shift towards a “technology-agnostic” approach is concerning. LT2 was intended to create new electricity supply quickly and affordably while meeting decarbonization goals. Rapid action to generate new capacity is necessary, but this new approach undermines long-term affordability, the climate, and predictability for the clean energy industry. 

Ontario’s clean grid has been key to attracting investment while meeting growing energy demands. However, increasing reliance on natural gas in recent years is making the grid dirtier. Its carbon intensity—the emissions emitted per kilowatt-hour of electricity—increased by a staggering 131% between 2019 and 2023. This puts our clean energy advantage at risk and compromises the ability of Ontario to attract investments that require clean energy, such as advanced manufacturing, digital and ICT, and the automotive industry. 

Shifting away from a non-emitting framework in LT2 risks further eroding Ontario’s clean grid. While a technology-agnostic approach might expand options, it could also lead to fossil fuel investments that hinder decarbonization and increase energy costs. With countries around the world, including Canada, moving to phase out gas generation, investing in new gas plants risks burdening taxpayers with stranded assets that will need to be shuttered before the end of their useful life. 

The IESO’s latest procurement shows that natural gas is not cost-competitive: clean energy storage projects secured through the LT1 procurement process cost an average of $672.32 per MW, while gas-fired generation projects averaged a much higher $1,681.14 per MW.  

We urge the government to prioritize clean, renewable energy through LT2 and ensure Ontario’s energy strategy remains aligned with its climate commitments. TAF is committed to working with communities, industry and all levels of government in support of a clean, reliable, and affordable electricity future for Ontario.