This consultation closes at 11:59 p.m. on:
May 14, 2023
On December 15, 2022, the Independent Electricity System Operator (IESO) released the “Pathways to Decarbonization” (P2D) study. The Ministry of Energy is seeking feedback on the findings of the P2D study in this consultation and in particular, the IESO’s “no-regret” recommendations.
Ontario already benefits from one of the cleanest electricity systems in the world, with over 90% of the electricity generated from emissions-free sources in 2021. While fossil fuels still make up a small amount of Ontario’s total supply mix, the majority is a diverse mix of clean resources like nuclear, waterpower, wind, bioenergy and solar.
On October 7, 2021, in response to the Independent Electricity System Operator’s (IESO) “Gas Phase-Out Impact Assessment” study which concluded that the decarbonization of the electricity system by 2030 was not technically or economically feasible, the Minister of Energy asked the IESO to evaluate a moratorium on the procurement of new natural gas-fired generation and develop an achievable pathway to zero emissions in the electricity sector. The IESO has called this report back to the Minister “Pathways to Decarbonization Study”.
In the study, the IESO indicates that a moratorium on new natural gas generation is feasible following the completion of its current long-term procurements, which includes up to 1,500 megawatts (MW) of new natural gas capacity to meet supply needs in the mid-2020s. The moratorium assessment shows that most of the projected Ontario demand in 2035 can be met with the build out of non-emitting sources, but some natural gas will still be required post-2035 to address local needs and provide the services necessary to operate the system reliably.
The IESO also considered the pathway to a zero-emissions electricity system under a scenario with a high demand forecast and emitting generation constraints informed by the proposed federal Clean Electricity Regulation. The pathway assessment illustrates a system designed to meet projected demand peaks almost three times the size of today by 2050. To achieve this, the pathways assessment includes 69,000 megawatts of non-emitting supply and 5,000 megawatts of conservation efforts, at an estimated capital cost of $375 billion to $425 billion, in addition to the current system and committed procurements.
While the moratorium and pathways assessments are not power system plans, the assessments provide insights into potential opportunities and challenges that Ontario faces in addressing future electricity system planning.
The Ministry of Energy is working strategically with its energy agencies and partners to ensure the building blocks are in place for an integrated energy plan that meets Ontario’s energy needs and while maintaining reliability and our clean energy advantage, at the lowest cost to families and businesses. Critical initiatives, such as the IESO’s Pathways to Decarbonization Study and the Minister’s Electrification and Energy Transition Panel (the Panel), will help to inform the government’s next steps towards its longer-term vision for an integrated energy system.
The Panel has been tasked with advising government on the highest value short, - medium- and long-term opportunities for the energy sector to help Ontario’s economy prepare for electrification and the energy transition. The Panel is developing advice on how Ontario’s energy policy and planning apparatus can foster efficient co-ordination across the energy sector. This advice will inform government as it looks to develop a future integrated energy plan. This future integrated energy plan will incorporate input from Ontario families and businesses, stakeholder groups and Indigenous communities.
The IESO’s Report Recommendations:
The IESO’s report provides “no-regret” recommendations that reflect the scope and magnitude of the effort needed to support an orderly energy transition while maintaining a reliable and affordable electricity system for Ontarians.
These recommendations from the IESO include:
- The acceleration of current efforts to acquire new non-emitting supply, including the implementation of recent conservation and demand management directives.
- Beginning the planning and siting work for new nuclear, long-duration storage and waterpower facilities, as well as transmission infrastructure, to allow for faster implementation.
- Innovation and investment in low carbon fuels, such as clean hydrogen, as they are untested at scale. Further work and investment are needed to determine if they can replace some of the flexibility that natural gas currently provides the system.
- Galvanizing collaboration amongst stakeholders, including Indigenous communities.
- Ensuring that regulatory, approval and permitting processes are ready to manage future investment at scale.
- Establishing an open, transparent and traceable process to measure progress and demonstrate the results of decisions and actions taken along the way.
The Ministry of Energy is seeking feedback on the report and, in particular, the IESO’s “no-regret” recommendations. We are particularly interested in comments and responses on the following questions:
- The IESO’s Pathways Study recommends streamlining regulatory, approval and permitting processes, citing that it can take five to 10 years to site new clean generation and transmission infrastructure.
What are your thoughts on the appropriate regulatory requirements to achieve accelerated infrastructure buildout? Do you have specific ideas on how to streamline these processes?
- The IESO’s Pathways Study recommends beginning work on planning and siting for new resources like new long-lived energy storage (e.g., pump storage), nuclear generation and waterpower facilities.
What are your expectations for early engagement and public or Indigenous consultations regarding the planning and siting of new generation and storage facilities?
- The IESO’s Pathways Study shows that natural gas-fired generation will need to continue to play an important role in the system for reliability in the short to medium term. The IESO’s assessment shows that most of the projected Ontario demand in 2035 can be met with the build out of non-emitting sources, but some natural gas will still be required to address local needs and provide the services necessary to operate the system reliably.
Do you believe additional investment in clean energy resources should be made in the short term to reduce the energy production of natural gas plants, even if this will increase costs to the electricity system and ratepayers? What are your expectations for the total cost of energy to customers (i.e., electricity and other fuels) as a result of electrification and fuel switching?
- The IESO’s Pathways Study highlights emerging investment needs in new electricity infrastructure due to increasing electricity demand over the outlook of the study. The IESO pathway assessment illustrates a system designed to meet projected demand peaks almost three times the size of today by 2050, at an estimated capital cost of $375 billion to $425 billion, in addition to the current system and committed procurements. Please see supporting materials for illustrative charts on capacity factor and cost by resource type.
Are you concerned with potential cost impacts associated with the investments needed? Do you have any specific ideas on how to reduce costs of new clean electricity infrastructure?
- The IESO’s Pathways Study recommends that for a zero-emissions grid by 2050, investment and innovation in hydrogen (or other low-carbon fuels) capacity could be required to replace the flexibility that natural gas currently provides the electricity system.
Do you have any comments or concerns regarding the development and adoption of hydrogen or other low-carbon fuels for use in electricity generation? What are your thoughts on balancing the need for investments in these emerging technologies and potential cost increases for electricity consumers?
- The IESO’s Pathways Study recommends greater investment in new non-emitting supply, including energy efficiency programs.
Following the end of the current 2021-2024 energy efficiency framework how could energy efficiency programs be enhanced to help meet electricity system needs and how should this programming be targeted to better address changing system needs as Ontario’s demand forecast and electrification levels grow?
- The IESO’s Pathways Study includes a scenario for over 650 MW of new large hydroelectric capacity to meet system needs in 2050.
A recently released assessment estimates that there may be potential to develop 3,000 to 4,000 megawatts of new hydroelectric generation capacity in northern Ontario and 1,000 megawatts in southern Ontario.
What are your thoughts on the potential for development of new hydroelectric generation in Ontario by private-, Indigenous- and government-owned developers?
While the capital costs for hydroelectric generation may be higher than nuclear, wind, solar, and natural gas, do you support investing in large scale hydroelectric assets that may operate for over a hundred years?
- The IESO’s Pathways Study suggest that significant transmission capacity will be needed to help balance intermittent sources of electricity (e.g., wind and solar) and to ensure cost-effective supply can be delivered to meet growing demands from electrification and economic growth.
Transmission will also be required to balance intermittent supply with dispatchable supply (such as natural gas and energy storage) and meet demand in regions with retiring assets.
What steps should be taken to ensure that transmission corridors can be preserved and lines can be built as quickly and cost effectively as possible?
- Do you have any additional feedback on the IESO’s “no-regret” recommendations?
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Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.
Get in touch with the office listed below to find out if materials are available.
7th floor, 77 Grenville Street
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