New demand-response initiative targets large buildings to curb electricity use during peak periods
STONEY CREEK — The Ontario government has launched a new energy-saving initiative aimed at reducing electricity demand during peak periods, as part of a broader strategy to strengthen grid reliability and lower costs for consumers and businesses.
The Peak Performance program, announced Friday by the Ministry of Energy and Mines, will offer financial incentives to commercial and institutional building operators who reduce heating, ventilation and air conditioning (HVAC) usage during times of high demand. The province expects the program to deliver up to 100 megawatts of peak-demand reduction in 2026, rising to 230 megawatts in 2027.
Incentives tied to peak-demand reductions
“Our government is taking action to help consumers and businesses keep costs down while ensuring Ontario’s electricity system remains reliable during periods of high demand,” said Sam Oosterhoff, Associate Minister of Energy-Intensive Industries. “The new Peak Performance program will give commercial and institutional buildings a new way to manage electricity use during the summer and support a stronger, more efficient grid.”
The initiative comes as Ontario anticipates electricity demand could rise by as much as 90 per cent over the next 25 years. Large buildings — including offices, retail centres and universities — are seen as a key opportunity to manage peak consumption, particularly during summer months when cooling needs are high but occupancy may be lower.
Under the program, eligible participants can reduce HVAC use for up to three hours on business days between June 1 and September 30 when the grid is under stress. Facilities must be capable of reducing at least 500 kilowatts of demand, either individually or as part of an aggregated portfolio, and will receive $20 per kilowatt in incentives to help offset equipment and monitoring costs.
Government frames program as affordability measure
“In this tariff war, Premier Ford is laser-focused on protecting affordability for Ontario families and businesses”, said Stephen Lecce, Minister of Energy and Mines. “That is why our government cut the gas tax by 10 cents per litre, opposed the carbon tax, and introduced Ontario’s largest energy savings program. Our government is taking another step forward unveiling another financial incentive for businesses, reducing their energy bills and saving the grid electricity.”
Officials say the Peak Performance program builds on the province’s broader Energy Efficiency Framework, a $10.9-billion, 12-year plan launched in 2025. The framework is expected to reduce peak electricity demand by 3,000 megawatts by 2036 — roughly equivalent to removing three million homes from the grid.
The province estimates the framework will generate $23.1 billion in system benefits and save ratepayers $12.2 billion by avoiding the need for new generation infrastructure.
Broad industry support for demand-response approach
Stakeholders across the energy, business and institutional sectors welcomed the program, highlighting its potential to improve grid reliability while delivering cost savings.
“This is another step in our government’s plan to help hardworking small business owners across the province manage energy costs and stay competitive while supporting a more reliable electricity grid. The new program will provide small businesses with real savings they can reinvest in growing their operations, creating good-paying jobs, and building a stronger Ontario economy,” said Nina Tangri, Associate Minister of Small Business.
Local officials emphasized the regional impact of the announcement.
“The announcement in Hamilton today is providing targeted investments in the places Ontarians rely on every day-including hospitals, schools, and workplaces in Hamilton-while helping meet growing electricity demand. By upgrading high-demand HVAC systems, we are reducing peak use, strengthening grid reliability, and keeping energy costs down for families and businesses,” said Monica Ciriello, MPP Hamilton Mountain.
“This is great news for families and businesses right here in our community. When large buildings like offices and shopping centres reduce their energy use during peak hours, it takes pressure off the entire grid — and that means lower costs for everyone. Programs like Peak Performance are about making Ontario’s energy system work smarter, so families can keep more money in their pockets,” added Neil Lumsden, MPP for Hamilton East-Stoney Creek.
Energy system operators and industry groups also pointed to the program’s long-term benefits.
“As Ontario transitions towards a more dynamic and resilient electricity grid, Save On Energy demand side management programs like Peak Performance will play a critical role in ensuring grid reliability, reducing peak demand, and supporting the integration of new technologies. This new program for commercial and industrial participants will build on the success of Peak Perks, the Save On Energy demand response program for residential and small business consumers, which has more than 320,000 participants,” said Chuck Farmer of the Independent Electricity System Operator.
Program builds on existing demand-response success
Peak Performance expands on Ontario’s existing Peak Perks program, described by the province as Canada’s largest virtual power plant. That program counted more than 300,000 participants and delivered over 200 megawatts of peak-demand reduction during summer 2025.
Industry associations say the new initiative leverages proven demand-response strategies while introducing new opportunities for large-scale participants.
“The Commercial HVAC Demand Response program is a smart, practical solution that benefits both the electricity grid and commercial buildings. BOMA Toronto is pleased to collaborate with the Province to support our members in participating in this important initiative,” said Susan Allen, President and Chief Executive Officer of BOMA Toronto.
“The launch of Ontario’s HVAC Demand Response Program comes at a pivotal time to help consumers manage energy costs. Local electricity distribution companies are key partners in supporting these programs and look forward to working with their commercial and institutional customers to optimize the benefits of this initiative and to enhance Ontario’s economic competitiveness,” said Teresa Sarkesian, President & Chief Executive Officer, Electricity Distributors Association.
Technology and HVAC sector representatives also underscored the operational advantages.
“Through the use of modern demand-response control technology, as outlined in this New Peak Performance Program, Ontario’s HVACR contractors, like Arvin Air Systems, can help reduce peak electricity demand from commercial and institutional buildings, providing greater reliability to the province’s electrical system while enhancing efficient operation of these buildings. This is good for the offices, colleges, malls and other large users of electricity engaged in the program; and it is also very good for all Ontario residents. We will all benefit from enhanced reliability in our electrical grid,” said Joe Muchynski, Chair, HRAI.
“As electricity demand grows, helping businesses manage peak usage is an important way to keep the system reliable and costs competitive. This Program gives large electricity users more flexibility to reduce demand when it matters most, while complementing the long term investments Ontario will need to power economic growth,” added Vincent Caron, Vice President, Policy, Ontario Chamber of Commerce.
With electricity demand set to rise sharply in the coming decades, Ontario is positioning demand-side management as a central tool in maintaining affordability and reliability across its energy system.