ONTARIO
ELECTRICITY SUPPLY MIX
Ontario’s electricity system has expanded and diversified significantly since the
commissioning of the massive hydroelectric station at Niagara Falls in 1925. The
province’s considerable hydro resources were sufficient to provide for almost all its
electricity needs until the early 1950s, when rising demand fuelled by the postwar
economic boom brought about the construction of large coal-fired plants near major
population centres. Subsequently, twenty CANDU nuclear reactors were constructed
between the early 1970s and early 1990s; today they account for 36% of the system’s
capacity and 62% of Ontario’s energy output (IESO, 2015a). Since the opening of
Ontario’s electricity market in 2002, almost 10,000 MW of natural gas capacity has
come online as well as several thousand megawatts of renewable energy generated
from wind, biofuels and solar power. In all, Ontario’s diverse supply mix totals over
35,000 MW – the second largest generation capacity of any province, after Québec.
Total Installed Electrical Capacity (MW)
Nuclear - 12,978 MW (36%)
Natural Gas - 9,920 MW (27%)
Hydro - 8,462 MW (23%)
Wind - 3,489 MW (10%)
Solar* - 1040 MW (2%)
Biofuel - 455 MW (1%)
Source: Independent Electricity System Operator, 2015. *These figures represent the solar and wind
power currently connected to the provincial grid in addition to that operating within local distribution
service.
A decade ago, coal-fired generation accounted for almost 25% of Ontario’s supply mix,
negatively impacting air quality and human health and rendering Ontario’s electricity
system the most polluting in the country (Environment Canada, 2015). After several
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years delay, the Liberal government’s pledge in 2003 to close all its coal-fired plants was
finally achieved in late 2014. The elimination of coal from the supply mix represents the
single largest greenhouse gas initiative in North America to date - emissions from
Ontario’s electricity sector have decreased by 68% since 2005, equivalent of taking 7
million cars off the road (Clean Air Alliance, 2015).
The current iteration of Ontario’s Long Term Energy Plan (LTEP) prioritizes conservation
over new generation, reflecting the province’s current strong supply situation and lower
demand growth. The province has decided not to proceed with construction of new
nuclear reactors but will undertake refurbishments at two of its three nuclear stations.
It is expected that the Pickering station, Ontario’s oldest, will be taken offline by 2020.
In terms of fossil fuels, the province has committed to natural gas for peaking purposes
and has undertaken targeted procurements for combined heat and power (CHP)
projects that focus on efficiency or regional capacity needs.
The LTEP calls for 20,000 MW of renewable energy to be flowing into Ontario’s grid by
2025, representing almost half (46%) of Ontario’s installed capacity. Of this, 10,700 MW
will be generated by wind, solar and bioenergy, while the remainder will be generated
through hydropower. Although the overall non-hydro renewable (wind, solar,
bioenergy) target remains the same as pledged in the original 2010 LTEP, the updated
version indicates they will be phased in over a longer time period than previously
planned.
RENEWABLE ELECTRICITY
Existing & Future Development
Ontario has become a leading jurisdiction in renewable energy development in Canada
since adopting the Green Energy Act (GEA) in 2009. In less than a decade, wind power
has grown to account for 8% of installed capacity (this figure has grown to 10% as of
August 2015, as pie chart above demonstrates) and supplies 3.5% of the province’s
electricity demand (CanWEA, 2015). An additional 2,500 MW will come online by the
end of 2015, solidifying Ontario’s position as the Canadian leader in wind energy (IESO,
2015).
Solar generation has also increased significantly under the GEA, with almost 1,000 MW
embedded in local distribution networks and 40 MW connected to the provincial grid
(IESO, 2015). Solar projects range in size from household solar panels, which allow
individual homeowners to sell their clean energy to the grid, to large arrays covering
many hectares such as the 80 MW array in Sarnia, one of the largest operating PV
facilities in the world. Bioenergy facilities, which generate energy through biological
processes, are also on the rise, using a variety of sources including landfill gas, biogas,
and renewable biomass.
Policy Mechanisms
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Ontario’s Feed-In Tariff (FIT) and microFIT programs are the key reason why renewable
development has accelerated so rapidly over the last 5 years. It allows homeowners,
communities, businesses and private developers to generate renewable energy and sell
it to the province at a guaranteed price for a fixed contract term. As the critical policy
tool of the GEA, the FIT program has served to create the needed certainty to drive
investment and job creation by levelling the playing field for renewable producers. Since
it was first enacted in 2009, the FIT program has undergone several reviews and
modifications. Initially, the FIT and MicroFIT program was an uncapped, open process
under which large and small generators could apply at any time. Under this first
iteration of the program, wind capacity quadrupled and solar energy grew from nonexistence to a significant place on the province’s grid.
In 2013 the Ministry of Energy issued a directive that removed large energy projects
(>500 kW) from the FIT program. In its place, the IESO has launched the Large
Renewable Procurement (LRP), a competitive process that effectively places a cap on
renewable capacity and reduces the number of large renewable projects. It also includes
new requirements for local buy-in and removes requirements for local content. While
the IESO maintains that the LRP is designed to “strike a balance between early
community engagement and achieving value for ratepayers” while keeping the province
on track to meet its 2025 target, renewable energy proponents argue that the target is
too low and that these changes leave industries relying on the policy with an unclear
future (Stokes, 2013). Targets in the first procurement include up to 300 MW of wind,
140 MW of solar, 50 MW of bioenergy and 75 MW of hydropower. Selected proponents
will be notified in December 2015.
COMMUNITY POWER
Over the past decade, community-owned renewable energy projects have become an
important feature of Ontario’s green energy landscape. Community power co-ops
represent a growing sector in Ontario, engaging thousands of citizens and communities
across the province. Co-operatives (co-ops) have proven an effective ownership model
for community-based energy planning. These include for-profit co-ops, which raise
funds through share offerings, and not-for-profit co-ops, which raise funds through
bond offerings. To date, roughly 99% of community power projects in Ontario are solar.
Community power has been supported through several mechanisms since the adoption
of the GEA, including price adders, priority points in the FIT program, contract capacity
set-asides (CCSAs) for community projects, and the Community Energy Partnership
Program (CEPP), although relatively few co-ops have been awarded FIT contracts (FCPC,
2013). According to community power proponents, the FIT program and CEPP rules and
timelines have been “based on the development pattern of commercial participants and
do not respect the development pattern of community power groups” (FCPC, 2013).
Going forward, community projects can find funding through the new Energy
Partnerships Program to be launched in the fall of 2015. In addition, while a recent
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directive by the Minister of Energy has removed co-operative ownership as criteria for
receiving FIT priority points, one-third of CCSAs, representing 2/3 of the total FIT
procurement, will be awarded to projects with 50% equity participation.
Some notable examples of Ontario-based community power projects in operation
include:

SolarShare: A not-for-profit solar energy co-op based in Toronto with a large
portfolio of projects ranging in size from 10 kW rural systems to 600 kW arrays on
industrial rooftops. In total, SolarShare’s members own 6 MW of installed solar
capacity throughout Ontario.

Ottawa Renewable Energy Co-op is a for-profit co-op that partners with a portfolio
of thirteen approved solar projects ranging from 10 kW to 400 kW around the city of
Ottawa. In total, its members own approximately 1 MW of generating capacity.

ZooShare is a not-for-profit co-op building North America’s first zoo biogas plant.
The facility will recycle 3,000 tonnes of animal manure from the Toronto Zoo and
14,000 tonnes of inedible food from local grocery stores.

WindShare is a for-profit wind power co-op that jointly owns Canada’s first urban
wind installation.
SOURCES
Canadian Wind Energy Association. 2015. Ontario. Retrieved 11 Aug 2015 from
http://canwea.ca/wind-energy/ontario/
Clean Air Alliance. 2015. Ontario’s coal phase out. Retrieved 12 Aug 2015 from
http://www.cleanairalliance.org/support-a-clean-energy-future/ontarios-coal-phaseout/.
Environment Canada. 2015. National Inventory Report 1990-2013: Greenhouse Gases
and Sinks in Canada, Part 1. Retrieved 29 Jul 2015 from http://www.ec.gc.ca/gesghg/default.asp?lang=En&n=5B59470C-1.
Independent Electricity System Operator. 2015a. “Supply Overview”, retrieved from
http://www.ieso.ca/Pages/Power-Data/Supply.aspx, 7 Aug 2015.
Stokes, L. “Ontario’s backward step on renewable energy”, 22 Jul 2013, Toronto Star,
retrieved 10 Aug 2015 from
http://www.thestar.com/opinion/commentary/2013/07/22/ontarios_backward_step_o
n_renewable_energy.html
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