The Ontario Independent Electricity System Operator's (IESO) Outlook for the next 10 years outlines the challenges that Ontario faces over the next decade in meeting the province's growing electricity needs.

The IESO report, which was released last week, highlights the need for new supply, transmission facilities and demand side initiatives to address the projected gap in supply and reduce Ontario's dependency on other jurisdictions.

"New generating and transmission facilities, particularly in the Toronto area, are urgently required over the next decade in order to meet the expected demands for electricity," said IESO President and CEO Dave Goulding. Goulding noted that considerable progress has been made since the IESO released its last 10-year Outlook in March 2004.

Since that time, new gas-fired generation totalling 650 MW has been installed, a decision has been made to restart Pickering Unit 1 representing another 515 MW and the Ontario Power Authority (OPA) has arranged for 2200 MW of new supply initiatives and almost 400 MW of renewable energy. Projects representing more than 9000 MW of additional generation are in various stages of discussion, development or negotiation.

"That progress must continue in order to ensure continued reliability of Ontario's electricity system," said Goulding. The provincial government has requested that the OPA procure 500 MW of new supply to address the needs for Toronto and 1000 MW for the western part of the Greater Toronto Area. These needs were identified in previous 10-Year Outlooks by the IESO.

There is an increasingly high risk of transmission facilities supplying downtown Toronto becoming overloaded during heavy demand periods. "As electricity demands continue to grow ... it is vitally important for generation to be located in the downtown area within the next two to three years in order to reduce power flows through heavily loaded transmission facilities to acceptable levels," says the IESO in its Outlook. "In the absence of additional generation as well as demand-side initiatives, it is expected that, emergency load shedding would be required in order to prevent the overloading of transmission facilities."

"The provincial government's plan to phase out the remaining coal-fired generation in favor of cleaner forms of generation represents one of the most significant undertakings in the 100-year history of Ontario's electricity sector," says the IESO.

The IESO cautions that the generation replacing coal-fired production should be situated to lessen the need for additional transmission development and that any delays in the new infrastructure development must be avoided in order to keep the coal phase out on track.

Aging generating facilities and the continued growth in demand contribute to the urgency for new supply, transmission and demand side measures over the next 10 years.

Energy consumption is forecast to grow from about 157 TWh in 2006 to about 170 TWh in 2015, an average annual growth rate of energy of 0.9%. However, conservation initiatives could reduce growth in demand.