Ontario’s electricity system is entering its most important planning phase in many years. As Canada’s most populous province and strongest economic centres, Ontario is experiencing rapid expansion in electricity demand, driven by growth in electricity-intensive industries such as electric vehicles, AI data centres, mining and advanced manufacturing. At the same time, the province faces an ageing generation fleet, requiring it to replace expiring contracts, add substantial new generation capacity and expand its transmission grid, while maintaining affordability and reliability. These developments necessitate long-term planning and analysis to sustain economic growth and enhance Ontario’s competitive advantage.

In response to these evolving needs, the Independent Electricity System Operator’s (IESO) 2026 Annual Planning Outlook (APO), released in March 2026, identifies system needs from 2027 to 2050 and outlines the actions needed to meet them. This annual planning exercise draws on market intelligence, forecast data, models and studies, and includes a long-term projection of Ontario’s electricity needs. For the first time, the IESO has introduced three demand scenarios – Reference, High, and Low – alongside a new “growth margin” concept that distinguishes uncertain and variable sources of demand growth from stable baseline demand. This has been done to reflect growing uncertainties associated with supply chain disruptions, geopolitical factors and fluctuating tariffs, while enabling a more flexible and resilient approach to planning.

The APO also highlights Ontario’s ongoing efforts to support economic and population growth through investments in new electricity infrastructure. Over the planning horizon, several IESO-recommended projects are expected to come online, adding about 1,800 km of new transmission lines to support mining developments in northern Ontario, agricultural and industrial growth in the south, and the integration of new and refurbished nuclear generation.

The release of Canada’s National Electricity Strategy in May 2026 further reinforces Ontario’s central role in the country’s energy transition. With the federal government aiming to double Canada’s electricity grid capacity by 2050, the strategy is expected to drive significant investments in grid expansion, nuclear energy, transmission infrastructure and clean electricity projects. Ontario is well-positioned to benefit from these initiatives through the expansion of nuclear power projects, modernisation of the electricity grid and stronger interprovincial transmission connections.  Overall, these developments are expected to enhance long-term energy reliability, economic growth and clean energy development across the province.

Demand forecasts and growth scenarios

Under the APO 2026, the reference scenario projects net annual energy demand growing from 152 TWh in 2026 to 250 TWh by 2050, with a compound annual growth rate (CAGR) of 2.1 per cent, representing 65 per cent total growth. The high-demand scenario forecasts 92 per cent growth to 297 TWh by 2050 (CAGR – 2.8 per cent). The low-demand scenario projects 38 per cent growth to 207 TWh (CAGR – 1.4 per cent). Ontario is transitioning from a summer-peaking to a dual summer-and-winter peaking system. In the reference scenario, this occurs in the late 2030s, driven by growing greenhouse lighting and cold-weather EV charging. In the high-demand scenario, it occurs by the early 2030s. This has significant implications for capacity procurement design.

Figure 1: Ontario’s net annual energy demand, 2026-50 (TWh)

Source: Annual Planning Outlook 2026

Supply forecast and changing generation mix

Ontario’s total installed capacity stands at approximately 39 GW, comprising a diverse mix of technologies. The province is focusing on refurbishing existing nuclear capacity. By the end of 2034, around 10.6 GW of nuclear capacity across the Darlington, Bruce and Pickering stations is expected to be refurbished. While these refurbishments are critical for long-term reliability, Ontario’s capacity outlook remains challenging. Installed capacity is projected to remain near 40 GW through 2033 before declining significantly in the 2040s as gas-fired and other contracted resources retire, leading to increasing supply deficits amid rising electricity demand. Unserved energy (demand not met by existing committed resources) begins rising around 2031 in the reference scenario, reaching about 19 TWh by 2035 and peaking near 95 TWh in 2044 without additional procurement.

IESO’s response to Ontario’s evolving electricity needs is built around a layered resource adequacy framework that combines short-, medium- and long-term planning mechanisms to maintain system reliability and flexibility. In the near term, adequacy through the early 2030s is expected to be supported by current in-flight actions, including nuclear refurbishments, ongoing procurement programmes, transmission expansions, conservation initiatives and the continued use of existing gas-fired resources. Medium-term planning focuses on integrating new generation capacity, storage technologies and demand-side resources to address growing system needs and increasing variability in electricity demand. Beyond 2035, however, the outlook becomes considerably more challenging as rising electrification, economic growth and resource retirements create substantial supply gaps. Addressing these long-term needs will require sustained investment across all resource types, including nuclear (including small modular reactors), renewables, storage, transmission infrastructure and emerging clean energy technologies.

Through the planned procurement efforts, IESO estimates that the province will add over 40 GW of new generation capacity by 2050 (including over 26 GW by 2035) and retire over 11 GW of gas-based capacity by then. By the end of 2050, Ontario’s installed capacity will reach around 66 GW, the majority of which will be contributed by nuclear (37 per cent), wind and solar (22 per cent), hydropower (17 per cent), natural gas (11 per cent) and storage (5 per cent).

Figure 3: Ontario’s projected installed capacity by fuel for 2026 and 2050

Source: IESO; Global Transmission Report

Ontario’s electricity supply is expected to grow significantly over the coming decades, although demand is also projected to rise sharply as electrification and economic growth accelerate. While Ontario is expected to maintain opportunities for electricity exports through existing interconnections with neighbouring provinces and US states, the IESO’s outlook highlights the need for continued investment in generation, storage and transmission infrastructure to maintain long-term reliability and adequacy. Recent cooperation agreements between Ontario and New York, including partnerships on nuclear technologies and electricity trade, further support the province’s role in regional energy integration.

Bolstering transmission infrastructure

To meet the province’s transmission needs, the IESO is undertaking five bulk system plans to address system needs across three main regions – Southern (includes Southwest Ontario and the Greater Toronto Area [GTA]), Eastern (extending from GTA to the Ottawa region) and Northern (includes the Northeast and Northwest regions) Ontario. Simultaneously, IESO is undertaking regional plans as part of its regional planning process. All of these plans identify transmission as one of the most cost-effective ways to address rising electricity demand, as it enables more efficient delivery of power from generation sources to areas where it is needed most.

Currently, Ontario’s energy planners have over 1,800 km of transmission lines in the pipeline. These projects are either planned or currently under development across the province, and more projects are expected to be announced this year. Some of these projects will be part of Ontario’s unprecedented competitive transmission procurement process – through the proposed Transmitter Selection Framework (TSF) – to help reduce costs, starting with the province’s first underwater high voltage direct current (HVDC) link connecting downtown Toronto. This 500 kV Third Line project, capable of delivering 900 MW to Toronto, was identified by IESO’s Integrated Regional Resource Plan for the City of Toronto in October 2025. It will extend from Bowmanville near the Darlington nuclear station to downtown Toronto and the city’s eastern areas. The request for proposals (RfPs) for the Third Line is anticipated in the first quarter (Q1) of 2027, with bid submissions expected by Q3 2027. The project is targeted to be in service by 2037.

Historically, Hydro One Networks Inc., the province’s largest grid utility with over 30,000 km of lines serving 1.5 million customers, has been the default developer for almost all new Ontario transmission projects. In recent years, it has been implementing projects via its pioneering 50:50 equity partnership model with indigenous communities, which provides economic participation and ownership stakes in transmission projects, advancing reconciliation while ensuring local benefits from infrastructure investments in traditional territories. Key examples of this are the Waasigan Line and Northeast Power Line.

Figure 1: Map of upcoming transmission projects in Ontario

Note: Dotted lines indicate conceptual locations for anticipated projects, and not final routes
Source: IESO’s 2026 APO

Southern Ontario

IESO is developing a comprehensive bulk transmission plan for southern and central Ontario, assessing the system’s ability to accommodate future generation connections and growing electricity demand. Expected to conclude later in 2026, the plan focuses on refining the portfolio of options through detailed technical assessments, input from stakeholders and communities, and insights from ongoing regional planning in the Southwest and GTA.

Southwest is witnessing strong transmission investment due to rapid growth in the agricultural, automotive, manufacturing and industrial sectors. Reinforcement projects in the Windsor-Essex, Chatham, London and Niagara regions are aimed at improving supply capability, increasing bulk transfer capability and maintaining reliability amid rising demand. Projects in GTA and Central Ontario are primarily driven by urban load growth, electrification and the need to strengthen bulk transmission supply into major population centres. Reinforcements are also being planned to accommodate future nuclear generation additions and improve east-west transfer capability across the provincial grid.

Eastern Ontario

Eastern Ontario transmission reinforcements are focused on ensuring long-term reliability and supporting future demand growth in rapidly developing regions. Projects are intended to improve supply capability and strengthen transmission connectivity between eastern Ontario load centres and the broader provincial grid.

The Eastern Ontario bulk plan aims to ensure the transmission system can reliably meet projected demand growth driven by electrification and economic development over the next 20 years. As part of the plan, two studies on the supply to Ottawa and Belleville together assess the capability of the bulk transmission system to serve the Greater Ottawa and Belleville area. The plan also explores opportunities to expand interties with neighbouring jurisdictions such as Québec and New York.

Northern Ontario

Transmission investments in northern Ontario are primarily focused on supporting mining development, electrification initiatives and regional economic growth. Major reinforcements are planned to improve electricity supply to northwestern and northeastern Ontario, particularly in areas surrounding Thunder Bay, Timmins, Sault Ste. Marie and Algoma. The projects are also intended to facilitate the integration of new transmission corridors and improve voltage stability across the northern grid.

Interties

A major study is currently under way to assess key equipment at the Ontario-Manitoba intertie, including two phase angle regulators and two step-up transformers that are nearing the end of their service life. To support this effort, IESO, Manitoba Hydro and Minnesota Power have jointly initiated a phase shifter study to develop a plan for replacing or upgrading this critical infrastructure and ensuring the continued flow of energy across the intertie. The study is expected to be concluded by 2026.

Separately, in March 2026, several Canadian provinces and territories signed an MoU to build cross-country grid infrastructure aimed at strengthening electricity connections across Ontario, British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island, Nova Scotia and the Northwest and Yukon territories.

Table 1: IESO’s list of planned transmission projects in Ontario

Note: FETT – Flow East Towards Toronto; STATCOM –Static synchronous compensator
*Identified in Energy for Generations, the government has taken action to accelerate development
Source: IESO 2026 APO; Global Transmission Report

The way forward

Ontario must continue to invest in new infrastructure to keep pace with the demand, replace ageing assets and deliver a reliable, affordable and increasingly clean electricity system capable of powering the province’s economic ambitions. Within this context, the APO plays a critical role as a guiding framework, providing structured insight into evolving capacity, energy, transmission and system operability requirements. Earlier outlooks identified significant supply gaps emerging in the mid-2020s; however, timely investments and coordinated system actions have largely mitigated these risks, ensuring resource adequacy through the early 2030s. This outcome demonstrates the effectiveness of the APO as a forward-looking planning tool, capable of aligning infrastructure development with long-term demand growth and broader system transformation.