Ontario’s Largest Energy Procurement Announcement

August 30, 2024

Written By David Macaulay, Geoff Stenger, Jason Roth and Tyler McAuley

Ontario recently announced the largest competitive energy procurement in its history. This follows on the heels of its recently completed procurement process that secured nearly 3,000 megawatts (MW) of capacity in the province. This latest procurement plan contemplates up to 5,000 MW of new energy by 2034, with a diverse mix of sources, including nuclear, hydroelectric, renewables, natural gas, and biomass. Below is a summary of the highlights of this announcement. More specific details can be found at this link for the Second Long-Term Procurement (LT2) .

Key Highlights of the Energy Procurement Announcement

• Energy Infrastructure Expansion: Ontario plans to procure up to 5,000 megawatts (MW) of new energy by 2034, with a diverse mix of sources. The province says this expansion is crucial for supporting large-scale capital projects and to meet its forecasted 60 percent increase in electricity consumption across the Province.
• Municipal and Community Engagement: The procurement process will emphasize the need for municipal support and local community involvement. For developers, this means engaging early with local governments and stakeholders to secure the necessary approvals and community buy-in.
• Incentivization for Indigenous Participation: The procurement scoring is expected to continue incentivizing Indigenous participation among project proponents. Project developers with Indigenous partnerships, participation, and support are expected to improve the competitive standing of their procurement bids. 
• Focus on Northern Ontario Development: The government is incentivizing projects in Northern Ontario, unlocking Crown Lands for renewable energy. Developers should consider the potential for new infrastructure projects in these regions, especially those that align with the government's energy priorities.
• Agricultural Protection and Land Use: With strict measures to protect prime agricultural lands, including prohibiting solar farms in these areas, developers need to carefully assess land use options and ensure compliance with these regulations.
• Accelerated Procurement Timelines: The Independent Electricity System Operator (IESO) is expected to report back with a procurement design framework by September 20, 2024, and to consider how to conclude energy and capacity procurements by February 28, 2026.

Bennett Jones helps clients develop major energy, infrastructure, and construction projects through strategic and business-focused legal advice. To discuss the opportunities that Ontario's LT2 Procurement announcement may create for your organization, please contact one of the authors.

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