Canada: Energy Storage Developments In Canada, The U.S. And Beyond In The Last Twelve Months

Last Updated: August 10 2017
Article by David Stevens and Jasmine Chung

The topic of energy storage has been front and centre in the energy world in the past twelve months. As discussed previously ( here and here), energy storage has been referred to by many commentators as a "game changer" because it will greatly improve the efficient use of electricity resources (generation, transmission, distribution). In this article, we explore recent storage developments in Canada, the U.S. and beyond that have occurred since we introduced this topic last year.

Background

To provide some background on where energy storage stands today, GTM Research reported that the U.S. energy storage market alone is expected to increase tenfold to US$3.2 billion from 2016 to 2022, according to a recent report of the U.S. Energy Storage Monitor. One possible reason for the anticipated increase is that the cost to implement storage technologies has dropped significantly, making it more cost-effective. According to a recent McKinsey article, the average battery-pack costs are down from approximately US$1,000 per kilowatt-hour ("KWh") in 2010 to less than US$230 per KWh in 2016. Another possible reason is the growing understanding that storage can significantly improve the efficient use of renewable energy since it provides a mean for intermittent energy to be stored for use at another time. In this regard, the National Energy Board ("NEB") of Canada has identified the pairing of grid-scale electricity storage and renewable electricity generating technologies as a strong candidate to transform the energy system. By supporting a larger share of renewables in the electricity grid, the NEB suggested that energy storage could improve grid-stabilization and buffer peak electricity demands. A third possible reason to explain the expected increase in storage deployment is that many governmental authorities are putting in place legislation, regulations, policies, and programs to incent storage developments. Taking these factors together, it is no surprise that energy storage has generated tremendous interest from across the energy sector. We expect this interest to grow.

How Canada is advancing energy storage

As many anticipate the role that energy storage will increasingly play in the grid, we are beginning to see some legislative changes being made in Ontario and Alberta to encourage storage development. For instance, Ontario's net metering regulation (O Reg 541/05) was amended in July 1, 2017 in order to allow renewable energy generation facilities of any size with an energy storage component to be eligible for net metering whereas this was previously not permitted (as discussed here). In Alberta, the provincial government announced last November the introduction of a "capacity market" for electricity which experts believe will likely spur the development of renewable projects paired with energy storage due to their potential to create capacity value. Alberta's capacity market is expected to be in place by 2021.

The NEB's July 2016 Market Snapshot on energy storage in Canada reported that over 50 megawatts ("MW") of battery capacity is expected to be operational in Canada by 2018, accounting for 81% of the total electricity storage market. Flywheel accounts for another 11% of the total electricity storage market.

There are a number of storage projects that are currently under development in Ontario. For example:

  • Powin Energy has recently partnered with Hecate Energy to build, deliver, and install Canada's biggest energy storage project with a total capacity of 12.8 MW and 52.8 megawatt-hour ("MWh") at two sites in Ontario. The projects were all contracted with the Independent Electricity System Operator ("IESO") as part of their procurement process and are expected to be on-line by the end of September 2017. The six projects, split across two sites in Kitchener and Stratford, will deploy energy storage for frequency regulation, voltage control, and reactive power support.
  • Convergent Energy + Power has completed construction on its 7 MW energy storage project strategically located in local utility PUC Services territory in Sault Ste. Marie. IESO will monitor in the next three years the ability of the technology to collect, store, and release energy into the grid when required. If successful, it is possible that IESO may deploy the technology across the province to provide more reliable, effective, and affordable energy across the grid over time.
  • Northland Power has proposed to build a 400 MW pumped storage facility in Marmora, Ontario. The roughly CA$900-million project will feature a closed-loop configuration of an existing open pit mine and a new upper reservoir that will use off-peak power to pump water up into the reservoir and then release it back down into the mine during on-peak periods to generate electricity. Pumped-storage hydroelectricity (PSH) facilities are considered a growing contributor to grid reliability, according to the NEB.
  • In a more urban setting, Toronto Hydro piloted a pole-mounted energy storage system in Toronto in August of 2016. The system was developed by Ryerson University using eCamion battery technology. The storage unit, mounted on the top of an existing hydro pole, employs lithium-ion batteries that charge during off-peak hours and discharge during peak hours into the grid. Toronto Hydro reported initial success of the system in reducing strain on the local transformer. If successful, the unit could become a standard that is rolled out with all new installations on over 175,000 poles across the city.
  • NRStor Inc. (an energy storage project developer in Toronto), in partnership with Opus One Solutions (an electrical grid software engineering firm), launched a new company, MPOWER Energy Solutions, to distribute the Tesla Powerwall across Canada. The Tesla Powerwall, first introduced in May 2015, is a home battery designed to allow homeowners to store electricity generated by solar panels during the day and to go off-grid during peak periods when energy prices are high. It can also provide backup power for the home. The Powerwall 2.0 is now available in Canada and has generated widespread interest, though there has been some criticism in regards to the high cost to purchase and install the system.

As these examples show, Canada's energy storage market is beginning to take off. We will next explore how the U.S. has continued to build on its growing market in the past year.

How the U.S. is advancing energy storage on the state level in the regulatory space

According to GTM Research, the U.S. energy storage industry deployed 71 MW and 234 MWh of capacity in Q1 2017, which was the largest quarter ever – a 944% increase compared with Q1 2016 – in terms of energy storage installations. 21 states now have 20 MW of storage projects proposed, in construction, or deployed and 10 states have pipelines of more than 100 MW. Upcoming legislative and regulatory changes may lead to substantial increases in energy storage installations in parts of the U.S. A table showing recently proposed legislation on energy storage can be found here with some highlighted in greater details below.

  • California is the preeminent leader of energy storage development in the U.S., though other states are catching up. California was the first state to pass an energy storage legislation in 2013, AB 2514, which requires California's three investor-owned utilities ("IOU") to install 1,325 MW of energy storage by 2024. An additional 500 MW was added to the IOU's procurement obligations in 2016 through AB 2868. California also has a Self-Generation Incentive Program ("SGIP") that provides rebates for, amongst other qualifying distributed energy systems, behind-the-meter storage. The total SGIP budget authorized through 2019 is over US$566 million. California has been considering new legislation that would establish a state wide system of rebate programs to subsidize the cost of installation of customer-sited energy storage. If passed, the new legislation would require the Public Utilities Commission ("PUC") to conduct a proceeding to determine an annual dollar amount to fund the Energy Storage Initiative for the period between 2018 and 2027 to be collected by electrical corporations.
  • Oregon followed California's lead and implemented a state wide energy storage mandate, through HB 2193 on June 10, 2015, which requires each Oregon utility to have a minimum of 5 MWh of energy storage in service by January 1, 2020. Earlier this year, Oregon PUC released guidelines for state utilities to use when submitting proposals that will meet the state's energy storage requirements under HB 2193.
  • On March 9, 2017, New York passed Assembly Bill A6571 which amends existing legislation by adding a section respecting "Energy Storage Deployment Program." The purpose of this program is to encourage the installation of qualified energy storage systems. The amendment also requires the state to establish a target for such installations by no later than January of 2018.
  • On May 4, 2017, Maryland became the first state in the U.S. to approve an energy storage tax credit through Senate Bill 758. An energy storage system installed on a residential property is eligible for up to US $5,000 of tax credit while an energy storage system installed on a commercial property is eligible for the lesser of US$75,000 or 30% of the total cost. The state has capped the aggregate amount of tax credit at US$750,000 per year. Applications that qualify are to be approved on a first-come, first-served basis. The tax credit would apply to systems installed between January 1, 2018, and December 31, 2022.
  • On June 30, 2017, Massachusetts announced that it will set a 200 MWh energy storage target to be achieved by January 1, 2020 in accordance with Governor Baker's comprehensive energy diversity legislation. The target, set by the Department of Energy Resources, builds upon Governor Baker's Energy Storage Initiative, a US$10 million commitment to analyze opportunities to support Commonwealth storage companies and develop policy options to encourage energy storage deployment.
  • New Jersey implemented the Renewable Electric Storage Program which is a program that offers an incentive of US$300/KWh of energy capacity. The maximum incentive for each project is the lesser of US$300,000 or 30% of the total cost of the project, while the maximum incentive for each entity is US$500,000. The Board of Public Utilities approved 13 behind-the-meter storage projects totaling nearly 9 MW in capacity in 2015. Six projects were approved in 2016 and one has been approved so far in 2017. The program is presently not accepting any new applications.

Given the apparent embrace of energy storage seen in the initiatives described above, it would not be surprising if other U.S. states that have not yet adopted legislation on energy storage do so in the near future.

How the Private Sector is advancing energy storage globally

We are also observing ever-increasing private sector investments in energy storage around the world. Bloomberg New Energy Finance forecasts the global energy storage market may be valued at $250 billion or more by 2040. In particular, we highlight two recent activities that have received major media coverage in this month alone.

On July 6, 2017, Tesla won a tender to build in 100 days the world's largest battery, charged by renewable energy, in South Australia. This announcement came in the wake of an increasing number of blackouts experienced in South Australia, including one last year that left many homes in some areas without power for weeks. The 129 MWh project comprises the world's largest lithium-ion energy storage system ever and will be charged by a 99-turbine wind farm. The South Australian state government hopes that the battery will improve grid reliability, provide enough power for more than 30,000 homes, and provide emergency backup power in the event of a blackout.

On July 11, 2017, AES Corp (an American energy firm) and Siemens AG (a German engineering firm) announced that they will join force to create a 50-50 joint-venture for energy storage. The deal is expected to close in Q4 2017. The joint-venture, dubbed Fluence, will be operated independently of its two owners and will be based in Washington, D.C. AES and Siemens currently account for about 17% of installed energy storage globally. If the collaboration succeeds, it will be the most geographically distributed grid storage development venture. The two companies together claim 463 MW deployed across 48 projects in 13 countries.

It appears that energy storage may in fact be on its way to being a "game changer" in Canada, the U.S. and internationally in the energy space. We will continue to cover developments in this area as they unfold.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
David Stevens
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions