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Weather, economic impacts keep Ontario electricity demand steady in 2023

Total electricity demand in Ontario remained steady year over year at 137.1 terawatt-hours, down 0.47 TWh from the year before. Weather had a significant impact on 2023 demand, as the winter and summer months were milder than normal. Energy demand is also very closely tied to economic activity, which was diminished slightly owing to inflationary pressures.

Although overall energy use was flat, peak demand was considerably higher in 2023, with the highest peak day occurring on Sept. 5, when the system saw demand of 23,713 MW and the humidex that day hit 41 Celsius. The hot weather that day contributed to a peak demand that was 1,100 MW higher than the peak in 2022.

Summer system conditions were managed with three demand-response activations secured through the Capacity Auction, which helped lower demand in the days following the peak day of the year. On average, demand response provided approximately 550 MW of hourly relief during peaks. This is in addition to other peak-shaving initiatives such as the Industrial Conservation Initiative, which reduced demand by approximately 1,500 MW.

This summer also featured the first activations of the IESO’s Peak Perks residential demand-response program through Save on Energy. Notably, the last Peak Perks activation, on Sept. 7, achieved a maximum reduction of 54 MW. With 100,000 Ontarians now participating in the program, the contribution from this smart thermostat program will grow even more.

Ontario’s ability to import electricity was considerably affected because of hot, dry weather contributing to lower hydroelectric output as well as weeks-long wildfires in Quebec, which forced Hydro-Québec to curtail exports.

Nuclear refurbishments also continued, with three to four concurrent refurbishments taking place at any one time.  Output from Ontario’s nuclear fleet will return to previous levels once the current schedule of refurbishments is complete.

Capacity

Grid-connected capacity in 2023 totalled 38,193 MW.

Capacity Auction

The IESO secured 1,867 MW of supply for summer 2024 and 1,310 MW for winter 2024-2025 through the 2023 Capacity Auction, which was the first auction to be run using a capacity qualification process after enhancements were introduced. As Ontario’s electricity needs continue to grow, this year’s auction targets were increased to maintain flexibility to meet peaks and defer the need to construct new capacity resources.

Enhanced energy-efficiency programs

Ontarians continued to reduce their energy use in 2023 by more than 950 GWh* – equivalent to powering a city the size of Barrie for one year – by implementing energy-efficient improvements through the IESO’s Save on Energy suite of programs. This year, the IESO implemented enhancements and expansions to Save on Energy programs, including the Peak Perks, Retrofit Program, Local Initiatives and targeted support for greenhouse growers in southwestern Ontario.

* These savings have yet to be evaluated, measured and verified and are, thus, a preliminary figure.

Innovation

The IESO rolled out the Interruptible Rate Pilot, a tool to unlock additional demand-side flexibility by providing large customers with a pilot interruptible rate offering that enables eligible businesses to manage their electricity usage and lower their bills. The pilot has 73 MW of interruptible demand participating, and it entails participants being charged global adjustment at the pilot rate in exchange for consuming at or below a specific, contracted demand level during interruption events as identified by the IESO. In its first year, the pilot had seven interruption events – including three consecutive days in the first week of September, coinciding with the peak demand in 2023. The pilot participants met the requirements in each of the events.

Demand, Supply and Price

Here is how Ontario’s electricity system performed in 2023: