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Powering Tomorrow > What’s Driving Change? The IESO’s 2022 Annual Planning Outlook
Grid evolution

What’s Driving Change? The IESO’s 2022 Annual Planning Outlook

March 17, 2023  |  Article

Each year the IESO forecasts Ontario’s electricity demand, assesses the reliability of the electricity system and identifies capacity, energy and transmission needs. In our 2022 Annual Planning Outlook, the IESO forecasted an annual demand increase of 1.9 per cent, which is a slight increase from last year’s projection of 1.7 per cent.

This change is primarily being driven by economic growth and electrification, specifically the expansion of critical minerals mining, the steel industry’s transition to electric arc furnaces, electric vehicle battery manufacturing, agricultural greenhouse construction and the electrification of transportation.

Forecasted Annual Energy Demand by Sector
Graph showing forecasted annual electricity demand by economic sector from 2024 to 2042. In order from largest to smallest the sectors are residential, commercial, industrial, agriculture, transportation and other.

Anticipated increases in demand, coupled with nuclear refurbishments and retirements, underscores the importance of securing new capacity by the mid-2020s with more overall energy production required by the end of the decade. A robust and reliable transmission system will also play an increasingly important role as the need to transport and deliver electricity to different parts of the province becomes increasingly more important.

Forecasted Seasonal Peak Demand
Graph showing forecasted seasonal peak demand from 2024 to 2042 with demand reaching around 31,000 Gigawatts by 2042 representing an almost 8,000 Gigawatt increase from 2024.

While the Annual Planning Outlook forecasts upcoming needs – specifically the quantity, location and timing of forecasted demand - the IESO produces a follow-up study, the Annual Acquisition Report (AAR). The AAR signals to the sector how much electricity supplies will need to be acquired to meet demand. The IESO has several mechanisms in place that are designed to secure energy supply, including:

  • an annual capacity auction
  • five-year medium-term contracts
  • longer-term contracts for developing new facilities, and
  • development of new energy efficiency programs.

With a range of ways to competitively acquire supply, this multipronged approach will provide flexibility to adapt to changing conditions and help facilitate participation from new other technologies in the years ahead.

Information from these two reports allows existing and potential electricity suppliers to make investment decisions to help ensure that reliable, cost-effective, and sustainable electricity is available where and when it's needed.

Visit the Annual Planning Outlook webpage for the full report.