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
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
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.