Enel has become the latest big name to spy opportunities in the commercial and industrial (C&I) energy storage space in Ontario, Canada, signing an agreement this week for its first project in the region.
Due to come online in the first half of this year, Enel X, Enel’s advanced energy services division, through its acquired US subsidiary EnerNOC Inc, has done a deal with an apple orchard group, Algoma Orchards of Ontario, Canada, to install a 1MWh lithium-ion battery energy storage system at the latter’s facilities.
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Under an 11-year agreement, EnerNOC will continue to operate the behind-the-meter system and will reap financial benefits on two fronts: firstly from reducing the apple producer’s peak demand from the grid, as is common in such installations, and also by using the battery to participate in Ontario’s regional demand response programme.
Back in 2016, Energy-Storage.News reported from talks with the trade group Energy Storage Ontario (now known as Energy Storage Canada) that the clean energy industry credited the province’s regulators and policymakers for sticking to a “clean, reliable and affordable” remit when it came to grid and energy infrastructure planning.
This has lead not only to support for front-of-meter, grid-scale energy storage deployed directly to benefit the grid, but also created the likes of the Global Adjustment Charge, by which grid upgrades, decarbonisation and modernisation of the network are partly paid for by charging business electricity ratepayers’ peak demand costs. In its release yesterday Enel said the 1MWh Algoma Orchards battery would indeed benefit from financial savings under that policy.
A report from the Fraser Institute found that electricity costs for large businesses in Toronto and Ottawa, both cities in Ontario, rose by around 50% in each between 2010 and 2016, compared to an average of 14% for other cities in Canada. However, hourly energy costs have steadily declined almost five times over in that period.
David Hebert, director for East Coast sales for EnerNOC, says in a forthcoming editorial article for Solar Media / Energy-Storage.News’ Global Storage Opportunity 2018 supplement, that this rise, based primarily on the Global Adjustment, can be mitigated.
“Thanks to a recent policy change, more businesses in Ontario can start to gain control of the GA charges that drive up their annual electricity costs,” Hebert writes.
“Since 2010, Ontario businesses that qualified for the Industrial Conservation Initiative (ICI) have been assessed an annual GA rate based on each building’s demand at the top five peak demand hours for the Ontario grid every year. This created the opportunity for these buildings to reduce their annual GA charges — if you can predict when peak demand is most likely to occur and temporarily reduce your demand for that period, you can reduce your GA charge.”
While this had previously only applied to buildings or facilities with 5MW peak demand or more, in 2017 the rule was relaxed to include 1MW peak demand businesses and 500kW in some particular cases.
“This is where energy storage can play an important role. With insight into trends on the Ontario grid, businesses can set alerts when system peak is most likely to occur on the grid and seamlessly transition a portion of their building’s load onto an energy storage system,” Hebert writes, adding that the building should experience no difference in energy consumption.
Energy-Storage.News has reported on several such C&I projects and big investments into the region since that rule change, including US provider Stem Inc successfully closing an US$80 million Series D financing round to fuel its activities in Ontario as a recent example.
The Algoma Orchards project will use Enel’s DEN.OS (Distributed Energy Network Optimisation System) software to deliver both GA charge savings and to participate in Ontario’s Independent Electricity System Operator (IESO) demand response programme with Enel predicting “significant savings” for the orchard over the lifetime of the contract. Enel will procure the battery system, install and operate it, then share the savings with Algoma Orchards.
Algoma president Kirk Kemp said that the project was the latest in a long line of sustainability measures for the company and said employees were proud that it would “assist us in reducing our carbon footprint”.