Ontario Delivers Lowest-Cost Electricity Capacity Procurement in Province’s History

Press Release

June 12, 2026

New clean, affordable electricity capacity secured to power 640,000 homes during peak demand

AYLMER — As part of its plan to protect Ontario and build a more competitive, resilient and self-reliant economy, the Independent Electricity System Operator (IESO), at the direction of the Ontario government, has secured 640 megawatts (MW) of new electricity capacity through three selected projects under the capacity stream of the Second Long-Term Request for Proposals (LT2). The LT2 is a transparent, competitive, and technology-agnostic procurement that will secure the lowest-cost power for ratepayers from a wide range of potential available technologies. The successful projects in this latest stream received strong municipal support and include First Nations partners with at least 50 per cent equity ownership, helping ensure direct economic benefits to local communities.

Through these three projects, Ontario has procured capacity at a weighted average price that is substantially lower than any of the capacity resources procured in IESO’s recent competitive procurements. The new battery storage capacity resources are 36 per cent lower cost than the battery storage procured through the government’s earlier E-LT1 capacity procurement and 16 per cent lower cost than the battery storage procured through the LT1 capacity procurement, reinforcing the importance of competitive procurements in the energy sector. The selected projects will provide enough capacity to power approximately 640,000 homes during periods of peak electricity demand, strengthening the grid’s reliability while maximizing the province’s energy infrastructure. These projects have been awarded 20-year contracts, with commercial operations expected to begin by May 1, 2030.

“Ontario’s economy is growing at a rapid pace, and our government is taking decisive action now to ensure we have the reliable electricity supply needed to power that growth,” said Sam Oosterhoff, Associate Minister of Energy-Intensive Industries. “By advancing the largest competitive energy procurement in Ontario’s history, we’ve already secured new clean energy capacity to reliably and affordably power hundreds of thousands of homes and businesses. The competitive LT2 procurement process is driving down costs while securing the energy Ontario needs to continue creating jobs, attracting more investment, and protecting Ontario’s electricity system – for generations.”

Across the energy and capacity streams, the LT2 procurement has secured over 1,750 MW of new electricity supply through 16 projects provincewide, providing power for around 920,000 homes. All projects were selected with incentives for Canadian-headquartered companies and located outside Prime Agricultural Areas and in northern Ontario. The success of this procurement delivers on the province’s commitment to secure the necessary resources to build a resilient and self-reliant energy system.

With electricity demand projected to increase by as much as 90 per cent by 2050, the resources secured through the LT2 procurement will help ensure families and businesses continue to have access to reliable and affordable electricity, while providing investors with certainty that Ontario has the power to support new housing, manufacturing expansion and growing industries.

Advancing competitive procurements supports the government’s plan to protect Ontario and is a key part of Energy for Generations, the government’s long-term approach to ensuring the province has the reliable, affordable power it needs to be energy secure and drive economic growth. The government’s integrated approach and record-setting investments in energy infrastructure are also providing the certainty needed for Indigenous communities, municipalities, businesses and industry partners to invest confidently in Ontario’s future.

Quick Facts

• In August 2024, the Ontario government announced the LT2, the largest competitive energy procurement in Ontario’s history.
• The LT2 builds on the success of recent competitive procurements such as the Expedited Long-Term Request for Proposals (E-LT1) and the First Long-Term Procurement (LT1). The LT1 is the largest battery storage procurement in Canada’s history.
• In April 2026, the government announced the successful completion of the first window of the energy stream of the LT2, and that through this procurement the province had secured enough new clean energy to supply over 280,000 homes per year.
• With the conclusion of the capacity stream, the first window of the LT2 procurement is complete. Over the next few years, the IESO expects to run multiple requests for proposals submission windows under the LT2 umbrella to procure resources to meet system needs.
• The LT2 competitive procurement process required municipal support resolutions to ensure local support and consent, protected prime agricultural areas, and incentivized projects in northern Ontario and those with or by Indigenous communities on whose traditional territory the projects were proposed.
• The province is advancing one of the largest energy expansion plans in its history, including new transmission infrastructure, nuclear refurbishments, energy efficiency programs, various procurements for new generation, and investments in emerging clean energy technologies.

Quotes

“Today we are taking another step to support the province’s economic future, with three new energy storage projects that will meet the province’s electricity needs in the 2030s and beyond. With demand for electricity continuing to rise in the coming decades, our cadenced, competitive approach to procurements is continuing to deliver cost-effective results.”

– Lesley Gallinger
President and CEO, Independent Electricity System Operator

Media Contacts

David Bhatti
Associate Minister Oosterhoff’s Office
David.Bhatti@ontario.ca

Robert Quartarone
Communications Branch
Robert.Quartarone@ontario.ca

IBF5