Overview
One of the ways the IESO helps meet Ontario’s energy needs is through securing new supply through competitive procurements. The IESO works with large grid-connected generators, small-scale distribution-connected producers, communities, small businesses and individuals to address future supply challenges in a timely and cost-effective manner, and then manages the contracts and contract data and reports resulting from these procurements.
Resource Adequacy Framework
The Resource Adequacy Framework sets out the competitive strategy to procure electricity resources for short, medium, and long-term timeframes, balancing the needs and risks of both ratepayers and suppliers. This process aligns the acquisition of electricity resources with the system's evolving needs, ensuring the continued availability of electricity from various sources to maintain the reliability, sustainability, and affordability of Ontario's electricity system. Procurements are competitive and open to all resource types that meet eligibility requirements.
Procurement mechanisms under the Resource Adequacy Framework
| Mechanism | Scope |
|---|---|
|
Capacity Auction |
Balances fluctuating capacity needs from one year to the next, offering participants six-month obligations for summer and winter seasons. Executed on an annual basis.  Learn more: Capacity Auction |
|
Medium-Term (MT) Procurements |
Provides existing generation suppliers with greater certainty through five-year contracts and flexible contract start dates while helping ensure the IESO can respond to changing needs. Executed every 2 - 3 years, as needed. Learn more: Medium-Term RFP |
|
Long-Term (LT) Procurements |
Encourages investment in new resources through longer development periods and long-term contracts. Executed as needed, currently running annually. Learn more: LT1 RFP, LT2 RFP, Long Lead-Time RFP |
|
Programs |
Meets electricity and policy objectives in a more targeted manner as directed by government. Learn more: Small Hydro Program, Local Generation Program |
|
Bilateral Negotiations |
Secures resources where a need exists that cannot be addressed in a practical and timely way through competitive processes. Undertaken as needed. |
Target Setting and Stakeholder Engagement
To avoid the under- or over-commitment of resources, the IESO sets appropriate capacity and supply targets for short, medium and long-term procurements. As part of the annual planning process, the IESO reassesses Ontario’s electricity needs and monitors the technological advances within the electricity sector that may have benefits to the system, for example, reducing costs. Detailed information about target setting can be found in the IESO’s Annual Planning Outlook and within IESO procurement engagement materials.
Stakeholder engagement and consultation is important to the IESO, and we gather feedback from the sector to ensure the details of upcoming procurements are fair and understood. Information about past and upcoming engagement sessions can be found on the IESO Engagements webpage, or by subscribing to our mailing list.
Please contact customer.relations@ieso.ca if you have any questions regarding the Resource Adequacy Framework.
The IESO publishes Resource Adequacy updates that provide a status report on how competitive procurements are helping to meet Ontario’s future energy needs.
May 2024
The IESO’s first Long-Term Procurement under the Resource Adequacy Framework is now complete. The IESO targeted year-round capacity to come into service between 2026-2028 to meet system needs, and successful added 1,784 MW of storage and 411 MW of non-storage capacity to Ontario’s grid.
Resource Adequacy Update – May 2024
June 2023
As the need for new electricity resources in the near and long term in Ontario grows, the IESO is continuing to make significant strides towards meeting those needs. The most recent procurement for long-term supply has now concluded, adding a total of 882 MW to the province’s planned storage fleet, while complementary processes such as the growing Capacity Auction are securing resources to respond to upcoming system needs.
Resource Adequacy Update - June 2023
May 2023
The IESO is moving forward with the largest procurement of energy storage in Canada, with 739 MW of new capacity slated to connect to the grid by 2026. These storage projects will be accompanied by 586 MW of expansions and upgrades at existing natural gas facilities – providing a cost-effective and timely solution to secure operational flexibility.
Resource Adequacy Update – May 2023
August 2022
The IESO announced a series of procurements to secure more than 5,000 MW of capacity. A separate competitive procurement for existing generators also concluded with the IESO offering new five-year commitments to secure these resources at a lower cost than their previous contracts. In addition, the IESO extended contracts with several biomass facilities and began work on a program for existing small hydro facilities.