Ontario’s transition to a net-zero electricity system should embrace a comprehensive approach. It will require regulatory reforms, new business models, and technological innovation. This report establishes the need for immediate action to gain the benefits of a modernized electricity grid, and to avoid making investments in outdated and higher-cost power systems. The opportunity exists now to transition to a cleaner, more reliable, and cost-effective net-zero electricity system.
Ontario’s electricity system is undergoing a transition driven by rapidly increasing demand requiring billions of dollars of new investment, as well as by technologies that can competitively provide energy sources but operate in a different way than traditional technologies. Many of these new resources will be located at the local level, thus opening up an opportunity for these new resources to also provide local services.
One thing that is not changing is the need for a reliable electricity system. Reliability is more than just supplying kWhs. Related services include ensuring stable voltage and frequency levels, balancing electricity supply and demand, and responding quickly to unexpected grid events.
The Ontario power system transition that we advocate will create new opportunities and benefits. For example, distribution connected systems could allow capital expenditures to be deferred on expensive traditional technologies while enhancing local reliability using distributed energy resources (DERs) and non-wires solutions. The province should capture the full range of benefits available from existing clean energy sources and from future investments.
Four urgent actions the province should take include:
1 Competitively procuring bulk-level reliability from all types of resources, including non-emitting resources
2 Clarifying the future role of LDCs in Ontario
3 Enabling development of local flexibility markets
4 Improving coordination between transmission and distribution on future methods for procurement and operations.
The authors urge the government of Ontario to move without delay on modernizing reliability services in our electricity system and positioning the province to be a leader in the rapidly evolving net-zero economy.