Latest Updates on Ontario’s Long Lead-Time Request for Proposals

This is the latest on the Independent Electricity System Operator (IESO) Long Lead-Time Request for Proposals (LLT RFP). The LLT RFP aims to address growing demand in Ontario’s electricity sector by securing energy and capacity resources with longer lead times for project development.

Background

The IESO began engaging with stakeholders on the design of the LLT RFP in April 2025, following the issuance of the Long Lead-Time Request for Information (LLT RFI) in 2024. The IESO submitted the LLT RFI results to the Ministry of Energy (Ministry) on August 29, 2025.

Eligibility

The LLT RFP is a reliability-based procurement intended to secure incremental energy and capacity from new-build resources with a lead time of five or more years that will contribute to system needs over a 40-year term.

The LTT RFP will be bifurcated into an energy stream (up to 1 TWh) and a capacity stream (600 to 800 MW).

Reservoir hydro with storage capability (other than pumped hydro) will be eligible only for the energy stream. Long-duration energy storage (LDES) resources (including pumped hydro storage and compressed air energy storage) will be eligible only for the capacity stream.

The IESO is still exploring the possible eligibility of other emerging technologies, such as liquid air energy storage and compressed gas. Despite the new-build eligibility requirement, the IESO is also still considering whether to extend LLT RFP eligibility to hydro redevelopments.

Like the IESO’s Long-Term 2 (LT2) RFP, the project proponent must have at least two team members with experience in planning, developing, financing, constructing and operating at least one “Qualifying Project” (i.e., nameplate capacity of at least 1 MW that achieved commercial operation in Canada or the United States). The IESO is considering expanding the definition of “Qualifying Projects” for the LLT RFP beyond North America for LDES technologies new to Ontario, to include projects that have reached commercial operation in Europe and Australia.

Rated Criteria 

Rated criteria will be finalized by the Ministry in a future directive. For now,

• The IESO is considering adding a new mandatory requirement for LDES projects in the LLT capacity stream to have a minimum round-trip efficiency. It may also offer rated criteria points for exceeding this minimum requirement.
• The IESO expects a similar rated criteria approach for Indigenous community participation (i.e., more points can be obtained where the project involves Indigenous equity participation, and even more where the project is located on traditional Indigenous territories). The IESO is awaiting formal policy direction from the Ministry on this.

Contract Provisions

The IESO expects to incorporate similar must-offer obligation and planned outage provisions in the LLT as contained in the LT2 contracts. For energy stream contracts, the IESO recommends that proponents incorporate planned outages in their imputed production factors to avoid availability non-performance charges. For capacity stream contracts, planned outages will be considered as part of the calculation for availability non-performance charges.

The IESO is considering permitting one long-term outage during the second half (i.e., last 20 years) of the contract term up to a maximum of six months.

The same environmental attributes regime as in the LT2 contracts (i.e., supplier benefits from revenue) is proposed for the first half of the 40-year contract. Given the 40-year term of the LLT contract (as compared to the 20-year term of the LT2 contracts), the IESO is considering implementing a revenue-sharing mechanism between the supplier and IESO for the last 20 years of the LLT contract term.

Other items remain in flux, including the rolling average period over which non-performance charges will be determined, as well as the applicable escalation mechanism.

Next Steps

LLT procurement timelines are currently under development and will be coordinated with activities related to the first window of the LT2 RFP.

The IESO plans to offer early deliverability discussions with LLT RFP proponents beginning in December 2025 and issue deliverability guidance once the LT2 contracts are awarded, which is expected in late Q2 or early Q3 2026.

Stakeholders are invited to submit written feedback to the IESO by September 30, 2025.

Our team is closely monitoring developments related to the LLT RFP and will provide updates when more details are available.

For more information, please contact the authors or any other member of our Energy Regulatory or Power groups.