Annette Verschuren is chief executive officer of NRStor Inc. and chair of the MaRs Discovery District board. She is also former CEO of Home Depot Canada and Asia.
The electricity system in Ontario – and indeed across North America – is undergoing a rapid transformation as innovative technologies disrupt old ways of doing business.
At the same time, governments and regulators are rightly concerned about maintaining the affordability of the system, even as they ensure its reliability and sustainability.
The emerging technologies of grid-scale energy storage will help us meet all three of those goals, if we’re smart.
This innovative technology will allow us to align the supply of electricity more precisely with customers’ demand for it. The vast amount of energy currently wasted in Ontario’s electricity system can be stored for later use.
In doing so, we can save money for consumers, enhance the reliability of the system with backup power and reduce the need for additional generation at peak times.
However, the provincial government and electricity regulators need to take action to ensure the full value that storage technology can provide to the system is realized.
People and businesses in Ontario remain concerned about their energy bills. To reduce prices, government has been forced to massively subsidize the cost of power. Ontario taxpayers are on the hook for an estimated $5.6-billion this year alone just to maintain our residential and small-business bills at the current rates.
That figure is likely to grow as the government looks for ways to meet its commitment to reduce households’ power bills by 12 per cent.
The provincial government has told all participants in the system to find savings. Developing a fleet of storage projects could contribute to that effort with a low-carbon option that would produce substantial net savings to lower bills.
A big – if not the biggest – challenge for Ontario’s grid is that our supply is not aligned with demand. We are inefficient and waste a lot of energy, and this costs all of us a significant sum.
We’re now able to address a fundamental shortcoming of the traditional electricity grid: that electrons have to be used as soon as they are generated. We’re good at storing water; we’re good at storing food. But until now, we hadn’t conquered storing electricity at the grid level.
We can be world leaders in new energy storage technology. And we can do so while dramatically improving the efficiency of our electricity system and reducing costs to consumers.
However, we need to show some guts and seize the moment. We can’t be afraid of innovation. We need to embrace it, and make it work for us.
Projects that combine renewables and storage are beating out proposals for conventional generation in markets around the world. Stand-alone storage projects also complement a broad array of generation options, including Ontario’s nuclear fleet and hydroelectric facilities.
As the disruption in the power sector mounts, business and political leaders in this province have a choice. We can own the change and reap the rewards, or we will have it foisted upon us and pay the costs.
There are a number of technologies that can be deployed. Lithium ion batteries are increasingly cost-effective both on the grid and in industrial and even residential settings. Companies can use electricity to pump water or air into storage facilities during those hours when demand – and therefore wholesale prices – are low, and release the power when it is needed. Flywheels help the grid managers maintain the smooth reliability of the system on a minute-by-minute basis.
Ontario’s Independent Electricity System Operator recently released its annual planning outlook that shows continued surpluses in the amount of energy we have the capability to produce.
The IESO noted, however, that the energy is not being produced when we need to consume. Storage is the solution to this problem.
We need policies and regulatory approaches that recognize the value of storage, both as a provider of power and also as a customer. Storage also provides low-cost solutions to help grid managers ensure the efficient performance of the system – and that function also provides value.
Energy Storage Canada last year released a “road map” that provides a path through which energy storage can maximize value and the efficiency of the grid for ratepayers.
A key recommendation is for the province of Ontario to establish a co-ordinating committee that would include government as well as representatives from the IESO and the Ontario Energy Board to guide the update of regulation for storage facilities.
Such changes would also demonstrate the province’s commitment to maintaining a power system that is more than 90-per-cent carbon-free.
With a low carbon focus, our leaders can show the way at home and export our know-how to the world. This effort can make a difference way beyond our own country’s targets.
Canada is famous for its trading capacity and peacekeeping strength around the world. Let’s extend that strength to the sustainability of our planet. Our economy and society depend on it.