Two Incorrect Predictions from the IESO
The IESO recently made two predictions for the future of Ontario demand amidst COVID-19 and the 1 year hiatus of the ICI program. Prediction 1: Slow recovery of industry – Ontario’s demand won’t reach 2019 levels until 2025. Prediction 2: Based on a shallower downturn and a less dramatic impact form the pandemic, demand is expected to reach 2019 levels by 2022. Based on Edgecom Energy’s analysis, both of the predicted scenarios by the IESO will prove to be incorrect as it relates to peak demand – especially during the Coincident Peaks. Peak #1 in 2019 was 21,791 MW in July 2019 with a relatively mild temperature of 29˚C and humidex of 35, while harsh weather could have pushed the demand up to 23,000 MW as it happened in 2018.
The ICI hiatus was not the only reason for the increase in demand (up to 24,446 MW), TOU rates were also temporarily paused for residential and small businesses. According to IESO reports, there was a 15% increase in residential demand because of COVID-19. Demand on July 9, 2020, increased to nearly 25,000 MW, and Demand Response activation reduced the peak to 24,446 MW. The impact of overnight heat on demand was underestimated by the IESO. Ten hot days in a row caused a 2,500MW increase in demand in early July. This rise in demand happened as parts of the province were re-opening. All of these factors lead to a massive spike in Ontario Demand, above and beyond the IESO’s ‘extreme’ weather scenarios.
With the harsh weather predicted in September 2020 and the potential for a full re-opening during Stage 3, Ontario’s Peak Demand could hit 26,000 MW. Although system reliability will be maintained using imports and Demand Response, this large and sudden increase in Peak Demand shows the importance of Demand Side Management efforts like the ICI and Conservation.