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Ontario picks another 142MW/1,136MWh of BESS through expedited RFP

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Ontario’s electric system operator has announced the award of contracts to a further eight battery storage projects in its expedited Request for Proposals (RFP).

The awards by the Ontario Independent Electric System Operator (IESO) represent a total of 142MW of battery energy storage system (BESS) project bids by developers in the Canadian province’s long-term energy capacity procurement, LT-1.

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They follow on from 739MW of previously-announced winners across seven projects in the competitive solicitation, which is aimed at ensuring electric system reliability. While margins are thought to be adequate today, demand for power is projected to continue growing rapidly in Ontario in the second half of this decade.

In addition to the 881MW of chosen winners, more are expected: the provincial government demanded the IESO make a total procurement of between 1500MW to 2500MW of energy storage in October 2022. More recently, the IESO has determined that total to be 2200MW.

This is being bolstered with additional contracts for natural gas generation capacity to meet a 4000MW forecasted requirement, most if not all of which will come from expansions and refurbishments of existing power plant facilities. That part of the RFP is called the Same Technology Upgrade Solicitation.

As might be quickly inferred from comparing the numbers above, the eight projects selected in the latest round, Storage Category 2, are mostly on a much smaller scale than the seven chosen in May’s Storage Category 1 announcement.

The biggest winner appears to be Alectra Convergent Development, which is a joint venture (JV) partnership between energy solutions provider and developer Alectra Energy Solutions, and energy storage company Convergent Energy and Power.

Alectra Convergent Development had three successful bids totalling 80MW, although independent power producer (IPP) Capital Power had the single largest project awarded a contract in Storage Category 2, a 50MW BESS in the City of Brampton.

In Storage Category 1, the biggest project was Hagersville, a 300MW system proposed by French developer Boralex, and the second biggest a 265MW project by Atura Power, another IPP and a subsidiary of Ontario Power Generation, a provincial government-owned corporation. US energy efficiency and renewables company Ameresco recently revealed it is part of the JV working on Atura Power’s project.

It’s important to note also that the RFP stipulated energy storage projects must be able to discharge their contracted energy output over a 4-hour duration. That means all the projects awarded will be 4-hour, and that Hagersville, at 300MW/1200MWh, will be Ontario’s biggest BESS project so far, bigger even than the province’s flagship Oneida storage project (250MW/1000MWh).

Winners can be seen in the table below:

ProponentQualified applicantProject nameNameplate capacity (MW)Summer contract capacity (MW)Winter contract capacity (MW)Zone- location
1000234763 Ontario Inc1000234763 Ontario IncSFF064.994.744.74East – Township of Cramahe
1000234763 Ontario Inc1000234763 Ontario Inc9034.994.744.74Essa – Township of Armour
1000234763 Ontario Inc1000234763 Ontario IncOZ-14.994.744.74Bruce – Municipality of
Arran–Elderslie
Arlen Energy Storage 1 LPAlectra Convergent
Development LP
Arlen Energy Storage 1201919Southwest – City of Guelph
Goreway (Battery) LP1Capital Power CorporationGoreway BESS5047.547.5Toronto – City of Brampton
Vaughan 1E Energy Storage 1 LPAlectra Convergent
Development LP
Vaughan 1E Energy
Storage 1
201919Toronto – City of
Vaughan
Vaughan 3 Energy Storage 1 LPAlectra Convergent
Development LP
Vaughan 3 Energy
Storage 1
403838Toronto – City of
Vaughan
Walker BESS 4 Limited PartnershipWahgoshig Solar FIT5 LPAlmonte BESS4.9994.7494.749East – Municipality of
Mississippi Mills
Data from Ontario IESO

Weighted average price for all Storage Category projects was given as CA$881.09 (US$666.71)/MW Business Day.

Capital Power was also a winner in Storage Category 1 with a 120MW project, as was Wahgoshig Solar FIT5, a partnership between the Wahgoshig First Nation and private investors, which submitted a number of bids with developments of 4.99MW per site.

A little research shows that the other winner in Category 2, 1000234763 Ontario Inc, is a group of limited partnerships operating as a renewable energy investment vehicle under the name Solar Flow-Through Funds (SFF).

Subscribers to Energy-Storage.news Premium might know already from our May Editor’s Blog detailing what was at the time the busiest week so far in Canada’s energy storage sector – with the Storage Category 1 awards announced around the same time financial close on the Oneida project was announced – the contracts give developers a degree of long-term revenue certainty on their projects.

At the same time, the projects will be able to access merchant revenue opportunities to earn profits.

Ontario is also currently reforming its resource adequacy mechanism design and is seeking stakeholder engagement on draft proposals.

As highlighted in a recent Guest Blog for this site from Justin Rangooni, executive director of the Energy Storage Canada trade association, these are among a number of developments that show a growing recognition from Canadian legislators and industry alike that energy storage is crucial to achieving the country’s net zero goals as well as its energy system security and reliability.

Other major developments include the government’s announcement that it will introduce a tax credit scheme similar to that in place in the US. However, Rangooni said, ambitions still fall short of being able to support between 8GW and 12GW of grid-connected storage deployments by 2035 that Energy Storage Canada says the country needs.

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