IESO Releases 2026 Demand Forecast

November 25, 2025

The IESO has just released its 2026 demand forecast, which projects electricity demand across Ontario over a 25-year horizon. Consistent with recent years, we continue to expect significant increases in demand throughout the province driven largely by economic development, population growth and the electrification of industry and daily life.

The latest outlook underscores the urgent need for investments in new electricity infrastructure to keep the system reliable, affordable and sustainable, and positioned to catalyze economic development in every corner of Ontario.

This is IESO’s first demand forecast to reflect the province’s historic $10.9 billion investment in energy efficiency programs that are already moderating electricity demand while helping families and businesses save money. In all, IESO expects the new energy efficiency framework to save ratepayers $12.2 billion and reduce overall demand by more than eight per cent by 2050.

The IESO’s annual demand forecasts form the cornerstone of their iterative approach to planning and procurements, which ensure agility and adaptability to new conditions as Ontario makes investments in its energy future.

 IESO Annual Planning Outlook Webinar – November 18, 2025:

2026 Annual Planning Outlook Demand Forecast Key Takeaways

• The IESO’s latest APO forecast shows that Ontario’s electricity demand is expected to continue to increase
  significantly over the next several decades, driven by electrification, economic, and population growth.
  
• While this APO reflects short-term impacts caused by current geopolitical uncertainty, the long-term
  forecast shows that Ontario is poised to continue growing through the 2030s and beyond – consistent with
  trends seen in the 2025 APO.
  
• The 2026 forecast also reflects the new electricity Demand Side Management (eDSM) framework and its
  considerable contributions on slowing demand growth by helping families and businesses use electricity
  more efficiently.
  
• With the scale of growth expected in the long term, it is important that Ontario continues to make
  investments in new infrastructure to ensure the system can stay ahead of economic development.
  
• The IESO’s iterative planning and procurement processes are designed to ensure the IESO, the sector,
  and the province have the tools to respond to changes and preserve flexibility as it makes future-ready
  investments.

Industrial Decarbonization – Research Objectives

• To date, much of the IESO’s decarbonization and electrification focus has centered around
  transportation and residential/commercial heating.
  
• The Industrial Decarbonization initiative was developed to provide a better understanding of the
  decarbonization pathways for key industrial sectors in Ontario and the corresponding impact on
  Ontario’s energy system by:
  
  • Evaluating sector-specific decarbonization technologies and strategies for a representative
    participant in six key industrial sub-sectors (mining, pulp & paper, steel, cement, refining and chemicals).
    
  • Illustrating a typical decarbonization journey for a model facility in each identified sub-sector,
    leveraging the most cost-effective solutions.
    
  • Exploring ways the IESO can support decarbonization decisions through targeted incentives
    and programs.

Hydrogen in Ontario – High Level Findings

• Under modest growth scenarios, where hydrogen is assumed competitive for industrial decarbonization and
  heavy freight transportation, the projected 2050 demand for hydrogen in Ontario is ~ 700 kt.
  
• Hydrogen is highly reactive and has low volumetric density which makes it difficult and expensive to store
  underground and to transport via pipelines, trucks or ship:
  
  • Large-scale imports/exports of hydrogen and hydrogen hubs in Ontario are challenging.
    
  • Ontario’s hydrogen needs will mostly be met through decentralized production within Ontario either close
    to or on-site at hydrogen end use locations.
    
• Production of hydrogen will mostly be through electrolysis (green hydrogen) with some potential for steam
  methane reformation + carbon capture (blue hydrogen).
  
• The production of hydrogen through electrolysis will add significant power and energy demand to Ontario’s grid:
  
  • Results show potential electrolyser demand of approx. 5000 MW and 36 TWh by 2050 to meet Ontario’s
    projected 2050 demand.
    
  • The increase to system peaks can be mitigated to approx. 800 MW using curtailment strategies and can be
    further mitigated if electrolysers are powered by dedicated renewables built on-site.

Next Steps for Industrial Decarbonization & Hydrogen

Results have already supported the IESO’s advice to government on the development of Ontario’s lowcarbon hydrogen strategy, including:

• Development of the IESO’s Hydrogen Interruptible Rate Pilot.
• Design of the IESO’s 2025 Hydrogen Innovation Fund (HIF) program.

A hydrogen technical paper will be developed in 2026, summarizing findings and lessons learned from
the HIF.

More Information

Presentation

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