On August 28, 2024, the Government of Ontario launched its Second Long-Term Procurement (the "LT2 Procurement"). The LT2 Procurement is described by the Government of Ontario as the largest competitive energy procurement in the province's history, and builds on the province's plan to procure up to 5,000 megawatts of energy.
The press release announcing the launch of the LT2 Procurement identifies two initial, key dates:
- September 20, 2024: The Independent Electricity System Operator (the "IESO") is expected to report back to the Ministry of Electricity and Electrification with a procurement design framework.
- February 28, 2026: The IESO will consider how to conclude energy and capacity procurements by this date.
The announcement of the LT2 Procurement, which is open to "technology-agnostic" energy resources and includes wind and solar energy, also states that the procurement process will include:
- requiring energy project developers to receive municipal support resolutions to ensure local support and consent for new projects;
- prohibiting all projects in specialty crop areas and ground-mounted solar in prime agricultural areas to prevent solar farms;
- incentivizing projects located in northern Ontario and those which avoid prime agricultural areas, along with a plan to "unlock Crown lands" for renewable energy;
- incentivizing economic opportunities for projects involving Indigenous communities on whose traditional territory the projects are proposed; and
- requiring "Agricultural Impact Assessments" for any permitted projects in prime agricultural areas.
The LT2 Procurement comes at a time of increasing demand for electricity in the Province of Ontario. The IESO has forecast that the province's electricity consumption will rise by 60% by 2050, with many of the sources for the heightened demand arising from technological advances such as artificial intelligence and electric vehicles.
The Power Group at McCarthy Tétrault continues to closely follow the development of the LT2 Procurement in particular and electrification in Ontario generally. Please contact the authors or any member of the Power Group to learn more – we would be happy to assist you.
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