Ontario

How Long-Duration Energy Storage Can Boost Ontario’s Clean Energy Economy

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Ontario is facing a rising demand for electricity as it pursues economic growth and decarbonization goals. The province needs to invest in new zero-emissions generation, storage, and transmission resources to meet its future energy needs. Among these resources, long-duration energy storage (LDES) can play a vital role in integrating renewable energy, enhancing grid reliability, and reducing costs.

Ontario

What is LDES, and why does Ontario need it?

LDES is a group of technologies that can store and discharge energy over periods of 10 hours or more. Unlike conventional batteries, which are best suited for short-term applications, LDES can provide large-scale and long-term energy services to the grid. Some examples of LDES technologies are pumped hydroelectric storage, compressed air energy storage, hydrogen storage, and thermal storage.

Ontario needs LDES for several reasons. First, LDES can help integrate intermittent renewable generation, such as wind and solar, by storing excess energy when it is abundant and releasing it when it is scarce. This can reduce curtailment and increase the utilization of renewable assets. Second, LDES can complement nuclear generation, which provides baseload power but has limited flexibility. LDES can balance the supply and demand fluctuations and provide ancillary services, such as frequency regulation and voltage support, to the grid. Third, LDES can provide reliable capacity during peak demand periods, especially in winter when electricity consumption is high and renewable generation is low. LDES can also act as a backup source in case of outages or emergencies.

What are the benefits of LDES for Ontario?

According to a recent report by Energy Storage Canada (ESC), a national trade association for energy storage, LDES can bring significant benefits to Ontario’s electricity system and economy. The report, conducted by Dunsky Advisors, assessed the potential of LDES to contribute to the province’s decarbonization pathways and compared it to the baseline scenario developed by the Independent Electricity System Operator (IESO) last year.

The report found that LDES can enable a minimum of 6 gigawatts (GW) of additional non-emitting generation by 2032, which is equivalent to the capacity of four nuclear reactors. This can help Ontario achieve its net-zero emissions target by 2050 and reduce its reliance on natural gas-fired generation. The report also estimated that LDES can save between $11 billion and $20 billion in system costs over the 2023–2050 period, compared to the IESO’s baseline scenario. These savings come from avoiding or deferring investments in new generation, transmission, and distribution infrastructure, as well as reducing fuel and operating costs.

Moreover, LDES can create jobs and stimulate economic activity in the province. The report projected that LDES can support between 13,000 and 26,000 direct and indirect jobs annually over the 2023–2050 period, as well as generate between $1.4 billion and $2.8 billion in annual GDP impacts. LDES can also foster innovation and competitiveness in the clean energy sector and attract investments from domestic and international players.

What are the challenges and opportunities for LDES in Ontario?

Despite the potential benefits of LDES, there are also some challenges and barriers to its deployment in Ontario. One of the main challenges is the lack of clear policy and regulatory frameworks that recognize and reward the value of LDES to the electricity system. Currently, LDES faces market and regulatory uncertainties, such as the eligibility to participate in capacity auctions, the compensation for energy and ancillary services, and the allocation of costs and benefits among different stakeholders. These uncertainties create risks and discourage investments in LDES projects.

Another challenge is the technical and environmental feasibility of LDES technologies. Some LDES technologies, such as pumped hydroelectric storage, require suitable sites and large land areas, which may be limited or contested in Ontario. Other LDES technologies, such as hydrogen storage, are still in the early stages of development and need further research and demonstration to prove their technical performance and economic viability. Additionally, LDES technologies may have environmental and social impacts, such as greenhouse gas emissions, water consumption, land use, and community acceptance, which need to be assessed and mitigated.

To overcome these challenges and seize the opportunities for LDES in Ontario, the report recommended several actions for the provincial government and the IESO. These include:

  • Developing a long-term vision and strategy for LDES in Ontario, aligned with the province’s energy and climate goals and informed by stakeholder engagement and consultation.
  • Establishing clear and consistent policy and regulatory frameworks that enable fair and transparent market access and participation for LDES, as well as appropriate valuation and compensation for the services it provides to the grid and society,.
  • Supporting the development and demonstration of LDES technologies and projects through funding, incentives, procurement, partnerships, and information sharing.
  • Conducting comprehensive and integrated planning and analysis of the electricity system, taking into account the potential role and value of LDES in different scenarios and time horizons.
  • Promoting public awareness and education on the benefits and impacts of LDES, as well as fostering collaboration and dialogue among different stakeholders, such as utilities, developers, regulators, customers, and communities,

How is Ontario moving forward with LDES?

Ontario has already taken some steps to advance LDES in the province. In January 2024, the Minister of Energy, Todd Smith, issued a directive to the IESO to advance work on two proposed pumped hydroelectric storage projects in Marmora and Meaford, which have a combined capacity of 1.2 GW and a duration of 10 hours. The directive also instructed the IESO to determine the need for additional LDES resources and to report back by June 2024.

In July 2023, the provincial government released Powering Ontario’s Growth Plan, which outlined the actions the province is taking to meet the increasing demand for electricity driven by economic growth and electrification. The plan included new zero-emissions generation, such as nuclear and renewables, as well as new transmission infrastructure to connect load and supply centers. The plan also recognized the importance of LDES and stated that the government would work with the IESO to assess the potential for LDES to support the electricity system.

Furthermore, Ontario has a strong and diverse energy storage industry, which includes LDES developers, manufacturers, suppliers, and researchers. The province is home to several LDES projects and initiatives, such as the Lake Erie Connector, a 1 GW transmission line that can enable cross-border energy storage with the US, and the Hydrogen Optimized project, a 20 MW green hydrogen production and storage facility in Sault Ste. Marie. The province also hosts several research and innovation centers, such as the University of Toronto’s Centre for Applied Power Electronics and the University of Waterloo’s Waterloo Institute for Sustainable Energy, which are conducting studies and experiments on LDES technologies and applications.

Ontario has the opportunity to become a leader in LDES and to leverage its benefits for its clean energy economy. By addressing the challenges and barriers and implementing the recommended actions, the province can unlock the potential of LDES and ensure a reliable, affordable, and low-carbon electricity system for the future.


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