Market Snapshot: Why is Ontario’s electricity demand declining?

Release date: 2018-03-21

Average daily electricity demand in Ontario fell considerably between 2002 and 2016. The overall decrease in demand was primarily due to conservation efforts such as IESO’s Save on Energy programs, as well as improvements in energy efficiency. Light bulbs, which account for 15% to 20% of global electricity consumptionFootnote 1, now use up to 85% less energy thanks to LED and CFL technologies. Appliances such as refrigerators and freezers, which comprise up to 12% of household energy use, have also become more energy efficient both at the residential and industrial levels.

The decrease in grid demand is visible at each hour of the day. The average day in 2002 saw peak demand of 19 500 megawatts (MW), while the average day in 2016 only saw highs of 17 800 MW. Likewise, in 2002 daily average lows were 14 300 MW, whereas, 2016 lows only averaged 12 900 MW.

Source and Description

Source: IESO – Hourly Ontario and Market Demands

Description: This line graph shows the average daily electricity demand in MW each hour of the day from 2002 to 2016. Demands are seen to decrease fairly consistently each year. An additional line charts the difference between the 2002 and 2016 demand lines. From about 1 a.m. to 6 a.m., 2016 demand is roughly 1 430 MW lower. The difference increases to a peak of 2 710 MW lower at noon, and decreases again to about 1 650 MW lower than 2002 demand after 7 p.m.

The graph above shows average demand curves for a 24-hour day in Ontario. A typical daily cycle of electricity demand begins in the early morning, when many people wake up and start getting ready for the day: turning on lights, plugging in hair dryers and coffee makers, and preparing breakfast. As the day continues, offices and manufacturing plants consume more electricity with the operation of all types of machinery. Electricity demand generally peaks between 5 and 8 p.m., when people return home and turn on TVs, lights, laundry machines, and other household appliances. As nighttime approaches, retail businesses close for the day, people get ready for bed, and electricity consumption slows again before repeating the cycle the following day.

The gray line in the graph shows the hourly difference between demand in 2002 and 2016. Although the demand being met by the grid dropped for all hours since 2002, the largest decreases occurred over the daytime hours. While evening and nighttime demand decreased by just over 1 500 MW at each hour, daytime demand decreased by as much as 2 700 MW around midday. This is primarily a result of the increase in solar PV capacity, nearly all of which was installed after 2009. With the exception of some large solar farms, most solar capacity is attached to the households, businesses, and industrial facilities that consume its output. As a result, during the day when local solar generation peaks and these consumers supply their own electricity, demand from the grid is decreased.

Additionally, as the Ontario economy has shifted towards service-based business, and energy-intensive industrial activity such as pulp and paper milling has decreased, so has electricity demand during the workday. Economic recession around 2009 also affected business activity, but resulted in a broader decrease in demand.

Lastly, time-of-use pricing has had a minimal impact in shifting electricity consumption away from peak periods.

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