Canada's emissions-reduction policies and lower costs drive increasing investment in energy storage

Mark Lowey
March 31, 2021

Public and private investment in electrical grid-connected battery energy storage is growing, driven by lower costs for the technology and Canada’s goal of achieving net-zero emissions by 2050.

“The costs have been decreasing rapidly and that’s driven a lot of commercial interest,” Leonard Olien, director of energy storage at the Canadian Renewable Energy Association, told Research Money. “Decarbonization is really the driver, and electrification becomes a big part of that.”

Ontario has the most battery storage and other types of energy storage projects in Canada, mainly due to the province’s Global Adjustment Charge policy that puts the impetus on commercial and industrial electricity users to cut their peak demand electricity consumption.

But there is also increasing interest in energy storage among governments and businesses in Alberta, Quebec, Saskatchewan, Nova Scotia and other provinces, Olien said.

There are nearly 60 energy storage projects involving various technologies across Canada, along with 19 initiatives to promote or facilitate the further development and deployment of energy storage, according to the Canadian Energy Storage Activity Database. The database, developed and maintained by researchers at the University of Waterloo, was created as part of the Natural Sciences and Engineering Research Council of Canada’s (NSERC) Energy Storage Technology Network.

Ryerson University’s Centre for Urban Energy and NSERC are leading the five-year, $5-million pan-Canadian network, which consists of 15 universities and 26 industry and government partners focused on the future of energy storage.

Energy storage can include pumped hydroelectric, compressed air, flywheels, batteries and thermal technologies. Storage provides more than a dozen different services, including improving reliability and resiliency of the electrical grid, reducing ratepayer costs and reducing greenhouse gas emissions, Olien said.

The Trudeau government has set a goal to reduce greenhouse gas emissions by 30 percent below 2005 levels by 2030 and achieve net-zero emissions by 2050. In addition, Ottawa plans to raise the federal carbon tax to $170 per tonne in 2030, up from the current level of $30 per tonne.

Last week, the Supreme Court of Canada upheld the constitutionality of a carbon tax in a 6-3 decision.

Large commercial battery storage projects underway in Alberta

Alberta has two of Canada’s largest commercial battery energy storage systems.

TD Asset Management provided an initial investment for a 20-megawatt (MW) system, using Tesla Megapack Batteries, near Peace River in northern Alberta.

Calgary-based WCSB Power Holdings, owned by TD Greystone Infrastructure Fund, is buying and will own and manage three sets of the Megapack lithium-ion units for a total of 60 MW of storage capacity. The other two units will be installed in Buffalo Creek and Grand Prairie, also in northern Alberta, and be tied into the electrical grid by mid-2021.

TERIC Power Ltd. is designing and managing construction of the project.

“For utilities, battery energy storage provides a low-carbon solution to provide reliability and flexibility,” Olien said. Batteries help balance power to the grid as more wind and solar energy, which fluctuates with varying wind speed and sunlight, gets added.

Last August, TransAlta Corp. began operations at its WindCharger project, at the company’s Summerview wind farm near Pincher Creek in southwestern Alberta. The $16-million project, which received a $7.7-million grant from Emissions Reduction Alberta (ERA), uses a lithium-ion Tesla Megapack with a storage capacity of 20 MW.

Decision pending on Oneida Energy Storage project in Ontario

A study released last fall by National Research Council Canada found that in Ontario, an investment in energy storage would reduce greenhouse gas emissions by 11 percent by 2030.

The Canada Infrastructure Bank will make a final decision this spring on investing (amount yet to be made public) in the 250 MW Oneida Energy Storage project in southwestern Ontario. The battery energy storage project — which would be one of the world’s biggest — includes Canadian energy storage developer NRStor and Six Nations of the Grand River Development Corporation.

If at least 1,000 MW of energy storage were fully enabled in Ontario, net savings to ratepayers would total about $2 billion over the next decade, according to a 2020 report by management consulting firm Power Advisory LLC. The report was commissioned by Energy Storage Canada, the national association for the energy storage industry.

Jurisdictions across Canada pursuing energy storage

Canada currently has a total utility-scale energy storage capacity of more than 130 MW, 10 percent of which came online in 2020, according to the Canadian Renewable Energy Association.

In December 2020, Hydro-Quebec launched a new energy storage business aimed at power producers, transmission providers and distributors as well as commercial and industrial markets. EVLO Energy Storage Inc. will design, sell and operate medium- and large-scale energy storage systems.

Saskpower is planning to build Saskatchewan’s first utility-scale battery energy storage system, capable of powering 20 MW of load for up to one hour, in northeast Regina. The Crown corporation is applying for federal funding under the Investing in Canada Infrastructure Program to cover some of the project costs.

Olien noted that BC Hydro and Natural Resources Canada partnered to install a 1-MW battery energy storage system from S&C Electric Canada in Field, B.C., within the boundaries of Yoho National Park. The system, operational since July 2013, provides the town with back-up electricity in the event of power outages on a 55-kilometre electricity feeder line running from Golden to Field. The line is subject to outages from avalanches, fires and geological faults.

However, to ensure wider adoption of the technology in Canada, many jurisdictions still need to update their electricity-related legislation and regulations, Olien said.

“Just about every jurisdiction has some level of gap between what is on their books and what needs to be on their books to have a vibrant storage industry," he said.

The grid-connected energy storage market is projected to see global annual revenues increase from US $4.2 billion in 2020 to US $9.5 billion by 2025, according to energy consultancy HIS Markit.


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