Innovation Sandbox Challenge

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Background

In March 2023, the OEB launched the Innovation Sandbox Challenge, a one-time opportunity to provide $1.5 million and regulatory guidance to support innovative projects. The funding comes from administrative monetary penalties collected by the OEB regarding compliance matters.

The Innovation Sandbox Challenge is an opportunity for innovators in Ontario to submit proposals for solutions that advance the energy sector's understanding of how innovation can benefit consumers. It focuses on two themes: how to move pilots to broader implementation and innovative strategies to enhance consumers' understanding of their role in the energy transition.


Projects

Alectra

Project Title: Alectra eMobility Customer Engagement Platform

OEB Funding / Total Project Value: $325,000 / $2,587,576


Alectra will build upon its existing eMobility customer engagement web-based platform through a phased approach, initially helping customers understand the costs and benefits of electric vehicle (EV) adoption, and then, testing the ability of residential customers with Level 2 EV chargers to participate in demand response events. That would allow them to reduce their energy use during times when electricity demand is high. The project will also offer an online greenhouse gas reduction calculator and guidance on how to choose an EV charger and have it installed. Some customers will also benefit from EV energy management systems, which reduce the need for electricity panel upgrades.

Project Partners

Smart Energy Water (SEW.ai) provides the software for the platform.

Synergy North, an electricity distributor serving the Thunder Bay region. Alectra will share lessons learned with Synergy North, which is considering offering a similar program to their customers.

Opportunity, Barrier, and Solution to be Tested/Evaluated, as identified by the Proponent
Opportunity to scale a pilot / engage with customers on the energy transition Barrier (what keeps this opportunity from being realized in Ontario today) Solution to be tested / evaluated through the project
  • Engage customers on their EV ownership journey
  • Lack of tools to allow customers to better compare their energy costs (i.e., electricity vs. gasoline)
  • Lack of a one-stop shop for information and support regarding EVs
  • eMobility platform with innovative customized outreach strategies for customer recruitment to utility programs
  • Utility-sponsored EV charging station load management
Outputs

Project Outputs are:

  • Provide the eMobility platform to pilot participants and assess functionality and satisfaction. The eMobility platform will test outreach strategies for customer recruitment to provide insight for similar utility EV programs
  • Onboard vendors to install and maintain equipment and software
  • Conduct demand response/managed charging tests and test the willingness of customers to participate in them
  • Recruit up to 50 residential customers to participate in the pilot for approximately one and a half to two years. Initial recruitment will focus on onboarding customers onto the eMobility platform. Once customers are onboarded, they will be offered the option of electric vehicle supply equipment (EVSE) incentive programs
  • Evaluate the feasibility of launching a full deployment of the eMobility platform into Alectra’s customer platform and
  • Engage with the OEB to modify/clarify the potential role of the utility with owning (on-bill financing, asset treatment) and operating (data, load management) EVSE as distributed energy resources (DERs).
Expected Outcomes

This project is expected to help Alectra identify what aspects of business models (e.g., convenience, affordability and choice) and pricing models (e.g., what the customer pays vs. what the utility pays in exchange for DER controllability) customers best respond to so that programs can have an Ontario-wide deployment. These insights can be leveraged to push forward decarbonization initiatives that require customer uptake.

This project is expected to be completed by winter 2026-27.

 

Hydro One

Project Title: Bringing Along Low-Income Customers in the Energy Transition

OEB Funding / Total Project Value: $149,400 / $420,400

Note: The original OEB funding was $174,000 ($445,000 total project value). Hydro One ultimately did not proceed with an individual cash incentive to motivate customer participation, as it determined that free smart baseboard thermostats were sufficient. Therefore, an additional $24,600 wasn't claimed.


Hydro One will engage low-income customers to support their participation in and understanding of the utility’s residential demand-response program, myEnergy Rewards. Through this initiative, Hydro One will also gather insights on effective outreach strategies and demand-response program design for low‑income households. Up to 400 customers will receive smart thermostats to manage electric baseboard heating as part of the program.

Project Partners

CLEAResult, which is delivering myEnergy Rewards for Hydro One, will develop and design the custom dashboards and customer support services required for this project.

Opportunity, Barrier, and Solution to be Tested/Evaluated, as identified by the Proponent
Opportunity to scale a pilot / engage with customers on the energy transition Barrier (what keeps this opportunity from being realized in Ontario today) Solution to be tested / evaluated through the project
  • Learn about whether winter demand response with low-income residential customers can reliably reduce peak demand and energy costs.
  • Low-income customer engagement in the energy transition is an underexplored area.
  • Limited experience marketing and engaging in this customer segment in demand-response programs
  • Smart baseboard thermostats are a a relatively new technology that customers may not be aware of
  • Limited awareness among low-income customers of electricity peak management and time-of-use costs.
  • Expansion of Hydro One's myEnergy Rewards program to include free smart baseboard and thermosats to low-income residential customers
  • Program marketing, outreach, and engagement activities for low-income target market, which may include targeted email campaigns, phone calls and bill inserts, webinars / video clips, and promotion through community-based organizations.
Outputs

Project Outputs are:

  • Development and implementation of a marketing and outreach plan
  • Enrolment of up to 400 participants and smart thermostat installations
  • Development and implementation of control strategies, where approximately half of the participants act as a comparison group on an alternating basis for each demand-response event
  • Participant satisfaction survey development, distribution, and analysis
  • Analysis and reporting of program results, including the following sections:
    • discussion and analysis of customer uptake into the program
    • analysis of whether customer response was significant enough to determine that a broader rollout would be successful
    • a cost-benefit analysis fo the demand-response program, including number of events and reduction to peak demand
    • description of the marketing and engagement messaging and tactics employed and their impact
    • recommended rollout strategy and
    • recommendations and lessons learned on how to scale the program should it demonstrate success, low-income customer engagement strategies and outreach, and integration and communication between devices and a Distributed Energy Resource Management System.
Expected Outcomes

If successful, this project is expected to:

  • Help electricity distributors better understand how to effectively engage low-income customers and improve accessibility to energy transition initiatives
  • Generate insights about winter bill savings for low-income customers using baseboard heaters
  • Help electricity distributors better understand the potential for smart baseboard thermostats to deliver demand savings (in demand-response events) and bill savings while providing a positive customer experience

This project concluded in spring 2026.

 

Oakville Hydro

Project Title: Digital Customer (Residential and Small Business) Education and Engagement

OEB Funding / Total Project Value: $120,000 / $170,000


Oakville Hydro will leverage its customer engagement strategy, including Green Button data integration, and expand on its digital interaction through a mobile app with small business and residential customers to help them better understand and assess energy transition options (e.g., solar, storage, heat pumps) based on their electricity usage. Customized analysis will be provided to customers to help improve their understanding of the role they can play in the energy transition.

Project Partners

Fare Vostro Energy Solutions developed the app and will work with Oakville Hydro to modify it for the purposes of this project, assess the deployment strategy for both traditional and digital campaigns, seek customer feedback and adjust campaigns as needed. The company will also simulate grid impact and evaluate solutions under alternative business/customer ownership models.

Opportunity, Barrier, and Solution to be Tested/Evaluated, as identified by the Proponent
Opportunity to scale a pilot / engage with customers on the energy transition Barrier (what keeps this opportunity from being realized in Ontario today) Solution to be tested / evaluated through the project
  • Empower residential and small business customers to help better assess costs and benefits associated with energy transition options
  • Lack of understanding of the energy transition and the benefits that arise from it for residential and small business customers
  • An app providing personalized information on various options that facilitate the energy transition for residential and small business customers
Outputs

Project Outputs are:

  • An app with educational resources
  • Analysis of customer engagement on the app
  • Customer preference on asset ownership model
  • Scenario-based simulated grid impact from different energy transition scenarios, including when those impacts may occur and how utilities can manage or serve them
  • Campaigns to roll out the app using various channels such as their website, emails and customer calls
  • Presentations to disseminate lessons and observations with the industry and other stakeholders
Expected Outcomes

This project is expected to:

  • Help address economic barriers to DER adoption
  • Estimate economics for customers from the energy transition under alternative asset ownership models
  • Estimate timing of load growth and its impact on the grid under the business/ownership models studied to inform utility planning
  • Estimate reduction of carbon emissions from energy transition options

This project is expected to be completed by fall 2026.

 

Pollution Probe

Project Title: Innovation in Rural, Remote and Indigenous Communities

OEB Funding / Total Project Value: $100,000 / $145,000


Pollution Probe will develop two frameworks to help rural, remote and Indigenous communities better understand, participate in and benefit from low-carbon energy innovation to help meet net-zero targets. This project aims to recognize and incorporate the diverse motivations, needs and means of these communities, and to inform how governments and utilities can more effectively support each community’s transition toward net-zero emissions. These frameworks would be available for use by local governments, utilities and community leaders.

Project Partners

QUEST Canada, a non-profit that supports communities in their efforts to achieve net zero, will provide support to project deliverables, including research and engagement activities.

Suncor Energy Foundation will fund workshops for rural and Indigenous communities. 

Opportunity, Barrier, and Solution to be Tested/Evaluated, as identified by the Proponent
Opportunity to scale a pilot / engage with customers on the energy transition Barrier (what keeps this opportunity from being realized in Ontario today) Solution to be tested / evaluated through the project
  • Enhancing communities’ understanding of, participation in and benefits from low-carbon energy innovation
  • Lack of implementation of low-carbon energy innovation, including business models oriented towards rural, remote and Indigenous communities
  • Frameworks to enable communities to evaluate the potential of low-carbon energy innovation for themselves, participate in integrating innovation in rural, remote and Indigenous communities, and understand how to benefit from it
Outputs

Project Outputs are:

  • Establishment of an advisory committee that will provide guidance throughout the project
  • Four rural, remote and Indigenous community workshops: two workshops for rural and remote communities, the other two for Indigenous communities. These workshops will facilitate discussions, knowledge sharing and collaboration. After each workshop, Pollution Probe will document insights, ideas, recommendations, needs and barriers
  • Frameworks for rural, remote and Indigenous communities and their stakeholders developed through research and interviews on implementing low-carbon energy innovation strategies tailored to serve the distinctive characteristics of these communities. These frameworks will be refined and finalized based on research, workshops, discussion and stakeholder feedback during the project
Expected Outcomes

This project is expected to:

  • Examine how governments, the private sector and utilities will more effectively address each community’s unique low-carbon innovation path by leveraging the framework
  • Broaden the reach of low-carbon energy innovation across more communities
  • Examine how communities and the private sector can collaborate to promote projects that deliver mutual benefits

This project completed in winter 2025-2026.

 

Powerconsumer

Project Title: Flexibility Markets Handbook: Mapping DSO Functionality from Pilot to Scale: Identifying Regional Opportunities for Utility-scale Integration of Flexibility Services in the Energy Transition

OEB Funding / Total Project Value: $400,000 / $1,972,240


Powerconsumer aims to build an understanding of which areas of the energy system will best benefit from distribution system operators (DSOs) enabling flexibility markets through development of a Flexibility Handbook for Ontario electricity distributors. Flexibility markets are a way for distributors to allow for demand-side participation from customers, encouraging those customers to modify when and how much electricity they use. The project will leverage existing pilots to enable scalable flexibility markets in Ontario.

The project will complete the following:

  • Planning Needs Assessment: Targets distributor system needs that can be met with non-wires solutions
  • Customer Assessment: Assesses the potential non-wires solutions available from customers and their willingness to participate
  • Economic Assessment: Assesses economic potential of flexibility markets to meet system needs, and
  • Functional Assessment: Identifies what processes are required and where services can be shared for regional DSO functionality
Project Partners

Synergy North, Elexicon Energy, Enbridge Gas, ENWIN Utilities, Essex Powerlines, Hydro One Networks and Hydro Ottawa will collaborate with Powerconsumer to explore non-wires solutions planning opportunities and experiences.

Opportunity, Barrier, and Solution to be Tested/Evaluated, as identified by the Proponent
Opportunity to scale a pilot / engage with customers on the energy transition Barrier (what keeps this opportunity from being realized in Ontario today) Solution to be tested / evaluated through the project
  • Enhance flexibility in the distribution grid to help manage the increasing number of distributed energy resources (DERs) and demand-side market participation
  • Limited capacity for each distributor to identify opportunities for customers to change how or when they use electricity to lower system costs
  • Limited understanding of cost to procure non-wires solutions (cost of capacity, overhead systems costs, customer acquisition costs)
  • Limited understanding of how to navigate customer preferences and impact on flexibility available
  • Limited understanding of areas for regional co-ordination among electricity and gas distributors
  • Powerconsumer will develop a Flexibility Markets Handbook, providing decision-making tools and processes for distributors to find and use customer-sited non-wires solutions
Outputs

Project Outputs are:

  • Identification of high-value use cases/areas for analysis (and likelihood of implementation upon completion of the project)
  • DSO Implementation Guide (as part of the Flexibility Markets Handbook) that identifies what processes are required and where services can be shared for regional DSO functionality
  • Economic Assessment Report that provides economic feasibility assessment of flexibility services in terms of capacity outcomes (kW reduced on peak), economic outcomes and the Flexibility Markets Handbook
Expected Outcomes

This project is expected to:

  • Address several policy areas of interest, including integrating DERs, assessing and planning for the energy transition, and customer engagement
  • Improve the ability of electricity distributors to evaluate and adopt non-wires solutions as cost-effective alternatives to traditional grid infrastructure
  • Support the evolution of electricity distributors towards more active system management and modernized grid operations such as DSO capabilities

This project is expected to be completed by fall 2026.

 

Taykwa Tagamou Nation

Project Title: Indigenous Community Solar: Innovations to Enable First Nation Energy Transition Leadership

OEB Funding / Total Project Value: $351,000 / $468,000


Taykwa Tagamou Nation will investigate the challenges and opportunities arising from the energy transition for First Nations communities. The project will examine how renewable energy projects in Indigenous communities can be scaled to enable First Nations’ involvement in the energy transition, while also examining net metering and alternate business models and ownership structures. It will also compare socio-economic and financial impacts of existing projects with what would have been achieved if other business models or organizational structures had been in place.

Project Partners

JAZZ Solar Solutions is a developer of community solar and battery solutions. They will manage the overall project and co-ordinate external consultants. They will bring hands-on experience from community solar project design and development, as well as engineering, procurement and construction services in First Nations communities.

JM Energy Consulting will engage with community energy leaders to identify policy barriers faced by community-scale net metered solar projects. The company will also document potential alternative approaches and solutions to those barriers.

EnerStrat Canada is a consulting company that will analyze challenges affecting community energy projects and help identify practical options for scaling renewable energy projects in First Nations communities.

PB Advisory will lead research with First Nations communities and synthesize findings.

Right Path Advisory will analyze the financial and economic impacts of different ownership models for community renewable energy projects. Right Path Advisory will quantify the aggregated community economic benefits that could be accrued from scaling pilot projects to broader deployment in First Nations communities.

Opportunity, Barrier, and Solution to be Tested/Evaluated, as identified by the Proponent
Opportunity to scale a pilot / engage with customers on the energy transition Barrier (what keeps this opportunity from being realized in Ontario today) Solution to be tested / evaluated through the project
  • Enable scalable deployment of renewable energy projects in Ontario’s First Nations communities
  • Procedural barriers (e.g., administrative, partnerships)
  • Financing and business arrangement challenges
  • Regulatory barriers (e.g., Community Net Metering limitations)
  • Community Net Metering compared to alternative business models and ownership structures to enable scalable renewable energy deployment in Ontario’s First Nations communities
Outputs

Project Outputs are:

  • A detailed understanding of complexities, challenges and inefficiencies that hinder renewable energy project initiation, development and operation in First Nations communities
  • Lessons from other jurisdictions (within and outside Canada) related to Community Net Metering to inform potential regulatory changes
  • Analysis of alternate structures and business models of generation and monetization of renewable energy
  • Estimated aggregate economic impact if Community Net Metering or other programs are permitted and scaled to First Nations communities across Ontario
  • Development of recommendations to change regulations to enable Community Net Metering and/or alternative avenues for selling electricity, and financing and business arrangements to support broader adoption of renewable energy in First Nations communities across Ontario while minimizing impacts on other electricity sector stakeholders
Expected Outcomes

If successful, this project and its deliverables will have the potential to inform policy changes and business model approaches to help Ontario’s First Nations communities move towards energy sovereignty.

This project is expected to be completed in summer 2026.