High power costs spur 42 MWh of storage deals in Ontario

Dive Brief:

NRStor and IHI Energy Storage signed contracts for eight behind-the-meter (BTM) energy storage projects in Canada, totaling 42MWh.
IHI Energy Storage agreed to provide the lithium ion batteries, inverters and software for the projects; NRStor’s commercial and industrial (C&I) energy storage unit is developing the projects.
The energy storage projects, due online in 2019, are designed to address global adjustment charges the government of Ontario set up about 10 years ago, which led to higher electricity fees.

Dive Insight:

When Ontario passed the Green Energy Act in 2009, it also set up the Global Adjustment Charge to make up the difference between wholesale power prices and various programs the provincial government instituted, such as energy conservation programs and the cost of long term contracts for renewable energy.

The result was a steep rise in the province's energy costs. A 2015 report said Ontario ratepayers paid $37 billion more than needed between 2006 and 2014 and will spend an additional $133 billion by 2032 as a result of the global adjustment charges.

Those charges, however, have spurred innovation in energy storage as commercial and industrial customers look for ways to cut energy costs.

NRStor and IHI Energy Storage, a unit of IHI Inc. of Japan, are setting up the BTM projects designed to provide energy during periods of peak demand to cut demand charges.

“NRStor C&I is eager to assist Ontario Class A customers reduce their electricity cost, specifically their Global Adjustment charge, without impacting their carbon footprint,” Moe Hajabed, president at NRStor C&I, said in a statement.

As industrial customers continue seeking ways to lower their electric bills, other energy storage developers are attracted to Ontario as well. In April, Enel signed an agreement for its first energy storage project in Canada: a 1 MWh lithium-ion BTM system.

Last spring, NRStor teamed up with Hydrostor to develop a 1.75 MW, 7 MWh compressed air energy storage (CAES) plant in Goderich, Ontario. The Hydrostor technology pumps air into an unused salt cavern during off-peak hours and generates electricity by using the stored energy when electricity is in greater demand and more expensive. Unlike other CAES projects, the Goderich project uses Hydrostor technology that can capture heat from compressing air in order to avoid using natural gas.