Ontario is buying energy and lots of it in the next four years. The Long Term 2 (LT2) energy procurement is a once-in-a-generation and certainly the largest procurement in Ontario’s history: Largest competitive energy procurement in Ontario’s history – The Environment Journal. This energy buy will procure 7500 MW or 7.5 Million kilowatts. For context, one kilowatt-hour equals 1,000 watts used over the course of one hour.
This should be good news, right? Well, except for the fact that when Minister Stephen Lecce took over the energy portfolio, one of his first moves was to open what was initially touted as a non-emitting procurement to allow natural gas fired generation (and other emitting ways to produce energy). And it doesn’t stop there.
Here’s how it got worse:
- Last year in June, a new directive restricted solar projects on all prime agricultural lands (soil classifications 1-7) and effectively put agrivoltaic projects out of contention.
- Then in the fall of 2024, the Ontario government not only opened up the energy buy to gas plants, but it changed the rules by offering to give natural gas power plant developers an unquestionable advantage in the upcoming LT2 Request of Proposals (RFP) by offering full points to them while not offering the same opportunity to battery storage. And top points to facilities that can run for twelve hours continuously – something that only a gas plant can do.
- Then on July 4th of this year, the Minister went even further: in a directive to the Independent Electricity System Operator (IESO), which is leading the LT2 procurement, he instructed that the proposed auction rules favour natural gas generators by insulating them from most of the cost of gas transmission upgrades. Within four business days, the IESO announced that Ontario electricity ratepayers will be reimbursing gas generators 75% of upgrade costs “to address natural gas transmission cost uncertainty.”
At first, we were excited about the LT2 procurement for bringing online renewables in a way that we haven’t seen since the Feed-In-Tariff program was sunsetted around 2017 because we know that renewables are cheaper to deploy and will beat out the fossil competitors.
If you follow our blogs, you’ll know that in the past few months we have raised the alarm that the Ontario government has busily been re-jigging the most recent long term energy procurement to privilege natural gas (potent climate impacting methane).
Now we’re alarmed. And we’re not alone.
Industry players who typically are quiet during procurement because you “don’t bite the hand that feeds you” are also speaking out. At the July 10th IESO webinar on LT2, Brandon Kelly, director of regulatory and market affairs for Northland Power challenged the IESO by stating, “What you’ve done here is not to … allow these resources to participate; it’s to advantage them, and that’s materially different from the approach you guys have taken elsewhere.”
Now, the renewable energy industry players are speaking out on the tilting of the scales in favour of natural gas projects during the upcoming procurement. You should too.
