By - Ontario's latest LT2 capacity procurement awarded all 640 MW of new capacity to battery storage projects at record-low prices.
- Adding to earlier wind and solar wins and reinforcing the growing view that clean energy technologies are increasingly prevailing on economics, affordability and grid reliability rather than policy mandates alone.
Ontario has selected three new battery energy storage projects through the capacity stream of its Second Long-Term Request for Proposals (LT2), securing 640 MW of new electricity capacity at what the province says is the lowest average procurement cost in its history.
The projects are expected to provide enough capacity to serve approximately 640,000 homes during periods of peak electricity demand when they enter commercial operation by 2030. All three include at least 50% Indigenous equity ownership and received municipal support before selection.
According to the province, the successful bids came in 36% lower than battery storage procured through the earlier Expedited Long-Term procurement and 16% lower than those secured under the original Long-Term procurement, highlighting the continued decline in storage costs through competitive bidding.
But beyond the numbers, the latest procurement reinforces a broader trend emerging across Ontario’s electricity market.
Earlier this year, the province’s first LT2 energy procurement selected wind and solar projects through a technology-agnostic competition. Now, in the capacity stream, battery storage has secured every awarded contract, once again prevailing through open market competition.
Industry groups say the results underscore the increasingly economic case for clean energy technologies.
“As home to Canada’s largest battery energy storage projects, other jurisdictions are watching and learning from Ontario,” said Vittoria Bellissimo, President and CEO of CanREA. “Canada needs more wind, solar and energy storage to power our future.”
The Pembina Institute argued that the results demonstrate a shift driven less by policy than by market economics.
“Today marks another win for affordability, energy security, and reliability in Ontario’s electricity system, and another proof point that the switch towards clean energy is no longer about climate policies, but is fundamentally market-driven,” said Gurprasad Gurumurthy, Senior Analyst with Pembina’s Electricity program.
The organization says falling battery prices and the ability to store low-cost renewable electricity for use during periods of peak demand are making storage an increasingly competitive alternative to traditional gas peaker generation.
CanREA estimates Ontario has now procured roughly 3.6 GW of utility-scale battery storage, while Pembina notes the province is already home to some of Canada’s largest battery installations and has invested nearly $14 billion in the domestic battery manufacturing supply chain.
With electricity demand projected to increase by as much as 90% by 2050, the latest procurement suggests Ontario’s future grid may be shaped as much by market economics as by energy policy, with battery storage playing an increasingly central role in delivering reliable, affordable power.
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