The Canadian province of Ontario is planning a large-scale competitive energy procurement exercise.
Billed by the Ontario government as the largest in the province’s history, the Second Long-Term Procurement (LT2) is expected to largely consist of new bioenergy, solar and wind projects.
In a letter addressed to the province’s IESO, Stephen Lecce, Ontario’s minister of energy and electrification, said that procurement should be transparent, competitive and cost-effective to secure technology-agnostic energy resources.
He asked the IESO to deliver a procurement design framework by Sept. 20, 2024, and consider how to conclude energy and capacity procurement by Feb. 28, 2026.
The Ontario government said LT2 should incentivize projects in northern Ontario and those which avoid prime agricultural areas, as well as prohibit all projects in specialty crop areas and ground-mounted solar in prime agricultural areas. Proposed projects will also require municipal support to ensure local backing.
In his letter to the IESO, Lecce said he backs the use of an Enhanced Power Purchase Agreement (EPPA) revenue model “to help facilitate a cost-effective and efficient market operation of new energy projects.”
Lecce said that electricity demand has risen in Ontario for the first time since 2005, with refurbishment schedules at the area’s nuclear facilities and expiring electricity supply and capacity meaning additional electricity resources are required to meet growing needs.
The IESO has recommended approximately 5,000 MW of new electricity resources be procured by 2034.
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