Ontario’s Goal to Decarbonize by 2050 Will Cost $400 Billion, Says Electrical Grid Operator

Ontario’s goal to shift completely from fossil fuel-based energy to green alternatives by 2050 will cost $400 billion and will require the size of the province’s electricity system to be doubled, according to the Independent Electricity System Operator (IESO).

“Attaining a decarbonized electricity sector by 2050, alongside aggressive electrification, would require a system more than double the size it is today at an estimated cost of around $400 billion,” said the IESO in a report published on Dec. 16 titled “Pathways to Decarbonization,” which was written at the request of Ontario’s Energy Minister Todd Smith.

“Significant investments in capital, materials, and labour are needed, and emerging technologies will need to be developed,” the report added.

Ontario’s energy decarbonization plans follow the federal government’s initiative to reach net-zero national greenhouse gas (GHG) emissions by 2050.

The IESO says Ontario is in “a strong place” to meet future decarbonizing targets, one of which will be a moratorium on natural gas production starting in 2027.

However, for the moratorium to be feasible, the province will have to ensure enough non-carbon-emitting energy sources are in place by 2027 to support the province’s electricity supply needs, the IESO said.

It added that Ontario’s energy sector workforce will need to increase by six times to possess the necessary labour capital for building the new projects.

“In all, the bulk system expansion needed to enable decarbonization in this scenario would require an investment in the range of $375 to $425 billion,” said the IESO’s “Pathways to Decarbonization.”

Net Zero

Acquiring land for the new zero-carbon energy supply locations will be another area requiring major planning and investments because of the need for project locations to be close to high-population density areas, said the IESO.

“An estimate of land use required for incremental resources in the Pathways study would be almost 14 times the size of Toronto,” it wrote.

“Communities and First Nations across the province have a growing voice in how and where new infrastructure is located.”

The Ontario Energy Association (OEA) previously announced it is supportive of the government’s net-zero GHG emissions targets while also acknowledging that achieving them will require large unprecedented changes to the energy sector.

“Reaching net zero by 2050 will require a major transformation of Ontario’s energy system,” said OEA in a June 2021 report, in which it stated that nearly half of the province’s energy comes from “refined petroleum products.”

“Altogether, 80 percent of Ontario’s energy consumption and 76 percent of its GHG emissions currently stems from fossil fuel use,” it added in the report titled “Net Zero 2050.”

The OEA also said that there must be “ongoing efforts” throughout the process of transitioning to zero-carbon energy “to keep the public informed about the transition plans to maintain public support for the initiative.”

“The OEA intends [to] leverage its expertise to support all levels of government in this effort.”