Ontario's latest electricity procurement round awarded contracts to 12 solar and two wind projects through its Independent Electricity System Operator.Frank Gunn/The Canadian Press
Even as he celebrated his province’s latest purchase of electricity to be generated using wind and solar resources, Ontario Energy Minister Stephen Lecce couldn’t help highlighting what he regards as the shortcomings of those technologies.
When temperatures fell to minus 30 degrees Celsius in Ontario this winter, he asserted, “nuclear and natural gas kept families warm. Be under no illusion, it was those resources alone that kept the power on for our families and for our businesses.”
Those comments, spoken last week at a media event in Hamilton, reveal tensions at the centre of plans for Ontario’s electricity grid. In response to an expected surge in demand for electricity, the province’s Independent Electricity System Operator (IESO) has launched several procurements since 2023 that have bought energy from plants that can be built quickly. Increasingly, winners have included sources disfavoured by Mr. Lecce and Premier Doug Ford.
The winners of the latest round include 12 solar and two wind projects, with a total combined generating capacity of 1,300 megawatts. The largest include the Dunns Valley Solar project (in northeast Ontario) and two wind projects in the province’s northwest, each with capacities of 200 megawatts; all of the winners are half-owned by First Nations.
Mr. Lecce has emphasized that his government is pursuing a “pragmatic all-of-the-above” and “technology agnostic” approach to supplying the province’s electricity. But that does not mean a level playing field for all options. As he clarified in Hamilton: “It means we’re complementing nuclear with hydroelectric and natural gas and renewables and biomass and biogas.” Other sources play a supporting role, but nuclear remains at the core – and it will continue to be purchased outside competitive procurements.
Ontario’s relationship with non-hydro renewables (which generated less than 10 per cent of Ontario’s electricity in 2024) is complicated. The previous Liberal government paid high prices for wind and solar resources, which sent Ontarians’ electricity bills skyward.
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Upon assuming office in 2018, Mr. Ford’s posture was resolutely against them. He tore up hundreds of renewable energy contracts right away, and he sought to terminate wind farms that were under construction. Mr. Ford said at the time that he’d remove all wind turbines in the province if he could.
There are at least two reasons why the Ford government was compelled to reconsider. The first is that the costs of renewables have continued to decrease, placing them among the cheapest options for new power generation. Guru Gurumurthy, an electricity analyst with the Pembina Institute, an energy think tank, said solar costs have fallen 88 per cent in the past 15 years, while wind has declined 74 per cent and batteries by 90 per cent.
“Renewables have become quite irresistibly low cost,” he said. “It’s too affordable to ignore now.”
The second reason is perhaps more important: Renewables can be deployed more quickly than alternatives. That’s crucial, because the government and independent observers believe Ontario faces a looming supply gap that must be bridged quickly.
Ontario traditionally relied on nuclear reactors for up to two-thirds of its electricity. But that proportion has fallen to half as reactors were either retired or taken offline for long periods for major overhauls.
Two 515-megawatt reactors at the Pickering Nuclear Generating Station were removed permanently from service in late 2024; its remaining four reactors are scheduled to come offline in September and will remain so for many years while they undergo a $27-billion refurbishment. And although the refurbishment of the Darlington station was completed earlier this year, reactors at the Bruce station will continue to go offline for their own overhauls until 2033.
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Even as reactors drop off the grid, the government anticipates surging demand for electricity. This has already begun: It rose 6.2 terawatt-hours last year from 2024, a 4.4-per-cent increase, according to the IESO. This was mainly due to a hot summer rather than new data centres or industrial activity, but further increases are anticipated. Ontario can’t build reactors quickly enough to meet its immediate needs.
The winners announced this month are scheduled to join the grid before May 1, 2030, four years from now. “That is a very standardized time for renewables to come online,” Mr. Gurumurthy said. “They’re really fast to build.” According to the Institute for Energy Economics and Financial Analysis (IEFFA), wind and solar projects can typically be built in 18 to 36 months.
By contrast, nuclear plants can take as long as 20 years to plan and construct. According to Mycle Schneider Consulting, nuclear plant construction times worldwide were “quite homogenous” in the 1970s and 80s, but they have varied widely over the past two decades. For the three years ended Dec. 31, 2024, the construction duration of 19 reactors which started up averaged nearly 11 years.
So far, Ontario’s experience has echoed these results. The Darlington New Nuclear Project, the province’s only new nuclear build since the 1980s, originated as long as two decades ago, but it was long suspended and then effectively restarted around 2021. Darlington’s first 300-megawatt new reactor isn’t expected to come online until 2030. (Three more are planned for construction by 2035, but they haven’t yet been approved.)
The Ford government also strongly favours gas-fired plants, which Mr. Lecce describes as an “insurance policy.” They have traditionally been among the quicker options to build, but that’s changing because gas plants have become a victim of their own popularity. According to the IEFFA, major turbine manufacturers are essentially sold out of combined-cycle turbines through 2030. And prices of combined-cycle plants have roughly tripled in just the past few years.
The IESO has struggled in recent procurements to add as much gas-fired generation as it has sought. Most of its gas procurements have amounted to recontracting with existing facilities as previous contracts expired: For example, the IESO has twice granted contracts to Ontario Power Generation Inc. since 2022 to extend the life of its half-century-old 2,160-megawatt Lennox Generating Station near Bath, Ont. New gas plants have been few and far between: Capital Power Corp. reported in February that a new 100-megawatt peaking facility in Windsor, Ont., is expected to commence commercial operation this summer.
In contrast, the IESO has awarded contracts to 25 battery storage projects since 2023, the largest two of which boast capacities of around 400 megawatts. Ontario is also considering adding pumped hydro storage to its grid.
The IESO’s next procurement is scheduled for June, when it will announce winners in a “capacity” auction that could again pit natural gas against storage. Mr. Gurumurthy said the IESO is warming up to the idea that batteries can be used to preserve grid reliability, and this could lead to the government pivoting from nuclear to renewables and storage.
“We hope to see a lot of batteries in that announcement,” he said.
Ontario’s preference for nuclear and natural gas remains undimmed. In interviews and public appearances, Mr. Lecce has criticized wind and solar farms in part because most components are made outside Canada (particularly in China) and the farms have shorter operating lifespans than reactors. And owing to their intermittency, he argues, one must build as much as 10 times more renewables capacity relative to nuclear power.
The province’s integrated energy plan, published last summer, makes clear that it expects to increase use of gas-fired plants to make up for reactors under refurbishment. Longer term, Mr. Lecce is eager to put the province’s nuclear industry to work on the proposed Wesleyville and Bruce C plants, which would more than double the size of Ontario’s reactor fleet.
“Why not pursue the path that not only is the most economical long term, but delivers the greatest upfront value for workers and for businesses in Ontario,” he told The Globe and Mail in late January.