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Climate Change / Renewables
Sep 9, 2016
IESO Publishes Ontario Planning Outlook for Ontario's Electricity System
On September 1, 2016, Ontario's Independent Electricity System Operator (IESO) released the Ontario Planning Outlook, which is described as "a technical report that provides a 10-year review (2005-2015) and a 20-year outlook (2016-2035) for Ontario's electricity system." This report is in response to a letter from Ontario's Minister of Energy requiring the IESO to prepare such a report to support the development of a new Long-Term Energy Plan (LTEP). Details about the Minister's direction are set out in an earlier post.
The Ontario Planning Outlook focuses in large part on the IESO's 20-year outlook, and looks at seven main items over that period. Notable observations and conclusions from the IESO in some key areas are as follows:
- Demand Outlook - After observing that projections of future demand are uncertain, the IESO presents several scenarios of flat, decreased and increased future demand. Scenarios of higher demand assume increased electrification of transportation and heating in response to the Climate Change Action Plan.
- Supply Outlook - The IESO concludes that Ontario is well-positioned to address any of the Demand Outlooks considered in the report. As explained, provided that planned resources come into service and existing resources continue to operate, Ontario's existing, committed and planned resources would be sufficient to meet the flat demand outlook, and could adapt to lower growth. Where there is significant future demand, additional resources will be required.
- Supply Resources - The report discusses the various resources that may be used to meet electricity demand in Ontario. In this section, there is some interesting commentary about future opportunities for deployment of "cleaner technologies" to meet future higher Demand Outlooks. Among the technologies explained and discussed are bioenergy (the conversion of energy in organic matter to produce electricity), electricity storage (to help manage variable generation, provide bulk system services such as regulation or voltage control, or help manage outages) and Distributed Energy Resources.
- Electricity System Costs - The IESO observes that the total cost of electricity service grew by 32% between 2006 and 2015, primarily because of new investments in generation and distribution and reductions in demand. However, if one assumes that electricity demand will remain flat over the years to 2035, then the IESO forecasts that the cost of electricity service will decline modestly due to reduced investments in electricity resources.
According to the IESO, the Ontario Planning Outlook will serve as an "objective baseline" for the Ministry of Energy and stakeholders for information about electricity demand and supply outlooks, and will inform the Ministry's formal consultation process for the development of the LTEP. The Ministry of Energy's website for the LTEP does not yet have any information about the timing for the LTEP consultation.