Province advances long-term energy strategy with three battery storage projects designed to support rising electricity demand
Competitive procurement delivers lower costs for ratepayers
The Ontario government says it has secured the lowest-cost electricity capacity procurement in the province’s history as part of a broader strategy to strengthen grid reliability and support long-term economic growth.
Announced Thursday in Aylmer, the procurement was completed through the Independent Electricity System Operator’s (IESO) Second Long-Term Request for Proposals (LT2) process. The initiative secured 640 megawatts (MW) of new electricity capacity through three battery energy storage projects that are expected to provide enough electricity during peak demand periods to power approximately 640,000 homes.
The LT2 procurement is designed as a competitive, technology-agnostic process intended to secure reliable electricity supply at the lowest possible cost for ratepayers. According to the province, the projects selected under the latest capacity stream achieved significantly lower pricing than previous energy storage procurements conducted by the IESO.
Ontario said the newly secured battery storage capacity came in 36 per cent lower than pricing achieved under the earlier Expedited Long-Term Request for Proposals (E-LT1) procurement and 16 per cent lower than the First Long-Term Procurement (LT1).
The province said the projects will operate under 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.”
Projects include Indigenous partnerships and municipal support
The Ontario government said all three selected projects received municipal support resolutions and include First Nations partners with at least 50 per cent equity ownership. Officials said the structure is intended to ensure local communities benefit directly from the projects through economic participation and long-term investment opportunities.
The procurement process also prioritized projects located outside prime agricultural areas and included incentives for developments in northern Ontario and those involving Indigenous communities.
The LT2 initiative forms part of the province’s broader “Energy for Generations” strategy, which focuses on expanding Ontario’s electricity infrastructure while maintaining affordability and reliability as demand increases.
Electricity demand in Ontario is projected to rise by as much as 90 per cent by 2050, driven by population growth, housing construction, industrial expansion and increased electrification across sectors including manufacturing and transportation.
The province said the latest procurement will help provide certainty for businesses and investors looking to expand operations in Ontario while ensuring households maintain access to reliable electricity during periods of peak consumption.
Ontario expands long-term energy infrastructure plans
Across both the energy and capacity streams of the LT2 procurement, Ontario has now secured more than 1,750 MW of new electricity supply through 16 projects across the province. The government estimates the total procurement will provide enough electricity to support roughly 920,000 homes.
The LT2 builds on earlier competitive procurements launched by the province, including the E-LT1 and LT1 programs. Ontario has described LT1 as the largest battery storage procurement in Canadian history.
In April 2026, the province announced the completion of the first window of the LT2 energy stream, securing enough new clean energy to power more than 280,000 homes annually.
With the conclusion of the capacity stream, the first procurement window under LT2 is now complete. The IESO is expected to launch additional proposal windows over the coming years as Ontario continues expanding its electricity system.
The province is also advancing broader infrastructure investments that include new transmission lines, nuclear refurbishments, energy efficiency initiatives and investments in emerging clean energy technologies.
“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