Ontario's IESO expects energy needs to reach 3 TWh in 2029

Ontario is facing explosive energy demand growth and is expanding transmission, capacity auctions and nuclear capacity to meet demand, the Independent Electricity System Operator said May 21.

The IESO held a webinar May 21 where representatives discussed the data from the 2025 Annual Planning Outlook, which assesses the province's electricity system needs through 2026-2050. Ontario expects a 75% increase in electricity demand by 2050.

The province is seeing elevated power prices compared to 2024, according to IESO data. Average April peak hour power prices in the province increased by 51% year over year to C$45.34/MWh.

"Energy demand is expected to grow around 2.2% annually on average over the forecast horizon, increasing from about 150 TWh of net demand in 2025 to 263 TWh in 2050," Adam Kilber, supervisor at IESO, said. "In the more near term, the growth rates are higher, reaching about 4.6% annually between [the] 2026 and 2030 time frame."

IESO expects an energy need of about 3 TWh starting in 2029, growing to about 7 TWh by 2034. Needs will also "increase significantly" as resources reach their assumed end of life, IESO said.

The growth projections are driven largely by data centers, commercial sector building electrification and industrial electric vehicle production and supply chains, IESO said. However, "significant uncertainties exist with many of these factors," such as the effects of macroeconomic downturns. The country already saw an overall decline in EV demand once incentives ran out, and Honda recently announced that it would delay its C$15 billion Ontario-based EV supply chain project.

IESO will utilize multiple planning scenarios going forward to better reflect the impact of these uncertainties in its outlooks, Kilber said.

The province has "multiple" transmission projects coming online to prepare for load growth, which are expected to come into service by 2030, said Sam Jager, transmission representative at IESO.

Supply

While the IESO expects to need increased capacity in the approaching summer months, the upcoming 2025 capacity auction is expected to address these needs, said Bonnie Chan, planning assessments manager at IESO.

"As we move into sort of the near-term and midterm time frame, those needs have decreased as compared to the 2024 April forecast," Chan said. "While the province is expected to switch from a summer peaking to a dual and winter peaking system in the 2030s, Ontario continues to show a greater need in the summer as compared to winter for most part of the duration of our study."

In the long term after 2050, the system will require additional reserves to account for nuclear refurbishment risks and the risks behind building out new nuclear generation, Chan said.

"Just given the chunkiness of our nuclear fleet, there also could be potential risks to resource adequacy if the return of the nuclear units is different than anticipated," Chan said.

Ontario is the country's leader in nuclear power generation. The province generated 5.7 TWh with nuclear steam turbines in February, about 40% of its total electricity generation. Construction on Canada's first small modular reactor was recently approved May 8.

Some of the ongoing actions expected to reduce system needs include nuclear refurbishments and agreements with Hydro Quebec for new capacity. IESO also pointed to resources secured in future capacity auctions helping to meet demand.

IESO requested feedback on the 2025 outlook due by June 4.