Procurement Future For Repowered Facilities In Ontario

This is the latest on the integration of repowered facilities in the second window of the Independent Electricity System Operator's (IESO) Long-Term 2 (LT2) Request for Proposals (RFP).

Eligibility

In late 2025, the IESO advised that repowered facilities would be ineligible to participate in the first window of the LT2 RFP (i.e., LT2(e-1) and (c-1)), but that steps would be taken to integrate participation by repowered facilities in the second window of the LT2 RFP.

This week, the IESO announced it would be offering an LT2 RFP stream for repowered facilities with a cap of 1 terawatt. This is in addition to the procurement target of 3 TWs for new-build facilities, which will proceed by way of its own separate stream to ensure they remain competitive against the project development cost advantages that already existing facilities may have.

Non-market participant distribution-connected resources, and other resources with a nameplate capacity of less than 1 megawatt, continue to be ineligible to participate in the LT2 and are instead encouraged to participate in the IESO's pending Local Generation Program.

Alignment

In order to align with what is now an expected milestone commercial operation date (MCOD) of 2032 for LT2(e-2) and (c-2) facilities, the IESO intends for already existing facilities with soon-to-be-expiring contracts to bid into the pending Medium-Term 3 (MT3) procurement in the interim so as to continue existing operation for the next five years. Upon expiry of such MT3 contracts, the IESO expects the existing facilities to compete as repowered bids in the LT2 RFP in parallel with the new-build facilities stream.

In other words, the IESO is seeking to extract more competitive pricing for existing facilities to continue operations until closer to their natural end-of-life before effectively reimbursing such facilities under LT2(e-2) and (c-2) contracts to undergo repowering.

Mandatory Requirements

Recognizing that existing facilities are already sited and operational, the IESO intends to take a less prescriptive approach to certain regulatory approvals and permitting requirements under the LT2(e-2) and (c-2) stream for repowered facilities as compared to the new-build facilities stream. For instance, similar to the MT1 and MT2 procurements, repowered facilities competing in the LT2(e-2) and (c-2) may only be required to submit an independent engineer (IE) certificate.

Notwithstanding, and subject to further government direction, LT2(e-1) and (c-1) municipal support and agricultural land use restrictions will continue to apply to the LT2(e-2) and (c-2) repowered facilities stream and to the new-build facilities stream.

Next Steps

Much of the repowered facilities stream for the LT2(e-2) and (c-2) is still in the design phase. We expect further developments concerning the above and other aspects as stakeholder engagement continues and before the final LT2(e-2) and (c-2) launch later this year.

Stakeholders are invited to submit written feedback to the IESO by March 13, 2026.

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