Dive Brief:

• Convergent Energy + Power and IHI Inc. brought online a 10 MW, 20 MWh behind-the-meter (BTM) energy storage system in Sarnia, Ontario, the groups announced Wednesday.

• The system is designed to reduce Ontario's Global Adjustment charge for an industrial customer by cutting the amount of electricity the customer uses during periods of peak demand.

• Convergent says its completed installation is the largest BTM storage system in North America.

Dive Insight:

Ontario's Global Adjustment charge is creating a lot of opportunities for energy storage. The charge can comprise up to 70% of the average industrial electricity bill in Ontario, creating incentives for large electricity users to reduce consumption during times when electricity charges are highest.

"It is a really exciting time up in Ontario," Johannes Rittershausen, Convergent's CEO, told Utility Dive. "They have a particular structure that ties large customers to peak periods of load. If they're able to discharge [their battery system] during the top five hours of [peak demand] during the year, they can save up to 40% on their electric bill."

Ontario is not the only market where high demand charges present opportunities for energy storage.

"There are several places in U.S. where ISOs have similar peak pricing, but they are not as lucrative as Ontario," Rittershausen said. More opportunities will open up as battery costs continue to fall. "We see a lot of growth in places with high demand charges," he said.

Convergent has been active in the market since 2014 and now has 26 MW of projects in the province, 14 BTM and 12 front-of-meter. The company offers commercial and industrial customers a shared savings service under which they do not have to buy, install or maintain the storage system. "The customer takes no risk on installation, cost or performance. If we don't perform, they don't pay us," Rittershausen said.

While Convergent has roots in the province, this is IHI's first storage project in Ontario. IHI provided the storage system as well as its capacity guarantee. The company now handles operations and maintenance services for the Sarnia project.