We should all be aware by now in spite of the dis-information campaigns by special interests, that the combustion of natural gas (a hydrocarbon), and the releases of methane during its extraction, transport and storage are major contributors to the greenhouse gas concentration in our atmosphere resulting in global temperature rise and increasingly disruptive climate events. While our politicians normally negotiate compromise agreements with special interests, when faced with a crisis, society needs our politicians to do what is needed to lead us out of danger. Retiring our gas plants is one such necessary step.
The claim that “replacing natural gas in Ontario’s Power System with a combination of wind, solar and energy storage would raise the commodity cost of electricity by about 50%” requires a heavy dose of skepticism. This is a claim made without context, tied to old ways of thinking and in line with the message of heavily invested Ontario Power Generation (OPG), its subsidiary Atura Power and gas provider Enbridge officials. Examples of this misleading antiquated form of thinking follow:
With the addition of significant amounts of intermittent wind and solar generation in Ontario, the role that natural gas plays in maintaining system reliability and operability has become even
more important. Gas is the partner or enabler of renewable energy. It is vital to maintain this peaking capacity, especially as the province turns to decarbonizing other sectors through electrification. -Chris Fralick President, Atura Power https://www.toronto.ca/legdocs/mmis/2021/mm/comm/communicationfile-126834.pdf
Ontario requires flexible generation in the electricity grid that only natural gas can provide. Natural gas accounts for nearly a third of the province’s installed capacity and is the only energy source with the flexibility to ramp up and down quickly to meet changing electricity use on demand. Further, natural gas enables intermittent renewable electricity in times when the wind doesn’t blow, the sun doesn’t shine, or above-ground infrastructure is impacted by climate events… Immediate and affordable carbon reduction can be achieved by leveraging existing technologies and energy infrastructure: [such as] Greening the gas supply with carbon-neutral sources including hydrogen and renewable natural gas (RNG), which are displacing traditional natural gas and reducing emissions.
-Tracey Teed-Martin Director Toronto Region Operations, Enbridge
While Enbridge’s hydrogen and RNG initiatives are laudable, the director provides no details of their cost or timeline. In fact ‘green hydrogen’ made from renewable sources is still very costly to produce and RNG can only provide a small fraction of the gas supply.
And then there’s this article ‘liked’ by Ms Teed-Martin on her ‘linkedIn’ page.
Environmentalists are urging Toronto to join 13 [now 19] other Ontario city councils that want the province to stop using natural gas for electricity generation… It’s tempting to ask Ontario’s electricity system operator to give these cities what they want by no longer supplying any power generated by natural gas plants. But I’m sure the power system staff are too kind-hearted to do that. Because it would create a lot of problems.
For example, anyone with surgery scheduled on a hot summer day would face the risk of “brownouts” during the procedure. City residents would lose their air conditioning and space heating just when they needed them most. And, without gas as a backup supply stabilizer, all those wind turbines that have sprung up over the past decade would need to be dismantled (though that might be considered a plus by most locals).
-Ross McKitrick, senior fellow at the Fraser Instititue
It should be noted that the Fraser institute has received donations from foundations controlled by fossil fuel titans Charles and David Koch and ExxonMobil, and has published material skeptical of climate change science since at least 2001. McKitrick himself has written a book which denies climate change.
All the above authors tend to ignore or downplay the potential of hydro/battery storage to replace our gas-fired plants.
In fact if natural gas electricity generating plants were required to pay the full federal carbon price – a price intended the stimulate decarbonization, then the economic case for maintaining their operations would quickly evaporate. And beyond 2030, carbon pricing rates are likely to accelerate and there will be little excuse for shielding electricity generators from paying the full rates, especially as we negotiate carbon border adjustments with international partners like the U.S. and the E.U.
If gas plants had to pay the carbon price on all their emissions, their running cost, at current gas prices, by 2030 would be 10 cents/kilowatt-hour (my simple calc based on 170 $/tonne) .. I can’t say for sure what the total cost from new wind, solar or run-of-river, would be, including grid modifications and storage, but pretty sure it’s a lot less than 10c/kWh, probably about half.
-John Stephenson, former Manager of Generation Projects with Toronto Hydro
(from private correspondence)
While Hydro-Quebec has committed itself to becoming carbon neutral by 2030 and U.S. president-elect Joe Biden campaigned on a promise to achieve net-zero emission for the entire U.S. power sector by 2035, OPG’s commitment is only to achieve net-zero emissions by 2040. And much of their plan involves high cost nuclear refurbishments, and high cost speculative technologies like SMR (Small Modular nuclear Reactors) and CCUS (Carbon Capture and Utilization or Storage). It also relies on the purchase of offsets, which is another way of saying “we are not up to the task of net-zero decarbonization so we will give our money to others who may do a better job.” In other words its is a derogation of responsibility.
According to Ontario’s Independent Electricity System Operator (IESO), the greenhouse gas (GHG) pollution from Ontario’s gas-fired power plants will increase by more than 300% by 2025 and by more than 400% by 2040 as the province uses gas to replace aging nuclear plants and to meet growing demand for electricity from population growth and increased electrification.
Ontario Clean Air Alliance Phasing-Out Ontario’s Gas-Fired Power Plants: A Road Map April 9, 2020
The plan to ramp up gas fired plants to compensate for lost baseload power from the decommissioning of the Pickering nuclear reactors and the refurbishment of nuclear reactors at Darlington and Douglas Point is simply unacceptable when viable alternatives exist.
Phasing-out Ontario’s gas-fired power plants will reduce our need to import fracked gas from
Pennsylvania and western Canada. Since the gas plants’ fuel costs are approximately 2.3 cents per kWh, our electricity costs will fall if we replace them with lower cost alternatives… energy efficiency investments are a lower cost option [and] spot market water power imports from Quebec are also a lower cost alternative during many hours of the year.
… the costs of new wind and solar generating stations and long-term firm water power contracts with Quebec … are all less than half the cost of re-building the aging reactors at the Darlington and Bruce Nuclear Stations. As a consequence, if Ontario ramps down its planned expenditures on high-cost nuclear rebuilds while it invests in Made-in-Ontario wind and solar energy and signs long-term contracts for Quebec water power, it will be able to simultaneously phase-out its gas plants and lower our electricity bills.
Ontario Clean Air Alliance Phasing-Out Ontario’s Gas-Fired Power Plants by 2030 Campaign: FAQs Sept 2020
Yet somehow these seemingly obvious steps are not acknowledged by OPG. Can we accept their statement below as just counterintuitive or deliberate doublespeak?
Although this may sound counterintuitive, natural gas generation will play an important role in transitioning off of fossil fuels. Once the Pickering Nuclear Generating Station winds down in 2025 (pending regulatory approval), Ontario’s electricity system may have to rely more on natural gas as other replacement sources, such as Small Modular Reactors (SMRs) are being built. As a result, OPG could see an increase in emissions to approximately 5 Mt of CO2 per year during this period.
It certainly displays a mindset that looks at climate solutions primarily within the framework of its nuclear and fossil fuel assets.
In the U.S. we see increasing evidence that renewables are competitive with natural gas.
Lazard is a world leading financial advisory and asset management firm that publishes annual Levelized Cost of Energy Analyses.
Lazard’s latest annual Levelized Cost of Energy Analysis (LCOE 14.0) shows that as the cost of renewable energy continues to decline, certain technologies (e.g., onshore wind and utility-scale solar), which became cost-competitive with conventional generation several years ago on a new-build basis, continue to maintain competitiveness with the marginal cost of selected existing conventional generation technologies.
When U.S. government subsidies are included, the cost of onshore wind and utility-scale solar is competitive with the marginal cost of coal, nuclear and combined cycle gas generation. The former values average $31/MWh for utility-scale solar and $26/MWh for utility-scale wind, while the latter values average $41/MWh for coal, $29/MWh for nuclear, and $28/MWh for combined cycle gas generation.
Levelized Cost of Energy and Levelized Cost of Storage – 2020 Oct 19, 2020
According to the U.S. Energy Information Administration:
Both the levelized cost and levelized avoided cost of electricity, when used together, simplify the factors contributing to the capacity expansion decisions modeled. The value-cost-ratio (the ratio of LACE-to-LCOE) shows combined cycle and solar photovoltaic are the most economically competitive generating technologies. Declining costs of intermittent renewable technologies, particularly solar photovoltaic, make solar cost-competitive with natural gas combined cycle.
EIA Annual Energy Outlook 2021 February 3, 2021
We can look to a number of jurisdictions for signs of things to come, and how battery storage provides numerous advantages over gas-fired plants.
While comparing the levelized cost of energy (LCOE) only tells part of the story, the economics for clean energy resources remain compelling when utilities compare portfolios of clean energy resources to new natural gas plants. [In Nevada] NV Energy’s recent procurement of 1,200 megawatts (MW) solar and 580 MW of four-hour battery storage already beats new natural gas on price. NV Energy paid $20/MWh for solar and $13/MWh for enough battery storage to shift 25% of daily energy, resulting in a total cost of $33/MWh per MWh delivered (including federal tax credits).
A premium of $13/MWh is already not much to pay to make solar and wind dispatchable. With solar costs projected to continue falling, this “adder” for shifting solar and wind to make it competitive with natural gas plants will only fall. And storage is not the only competitor to shift energy from times of excess to times when it is needed – flexible demand, transmission connectivity, or improved market operations also provide these services at a discount if policy changes can unlock these resources.
Lila Holzman, Mike O’Boyle, Daniel Stewart
Natural Gas: A Bridge to Climate Breakdown Energy Innovation March 2020
While simple-cycle gas plants (or combustion turbine plants) can rapidly “ramp” or increase and decrease their output as needed (especially during peak demand), battery storage has the ability to do this even more quickly—as the response by a Tesla battery to a generator going offline in Australia showed recently… In summation, PVS can provide a cost-effective and sustainable alternative to natural gas peaker plants over their lifecycle even if the tax incentives and rebates are faded-out in the future due to the falling cost of batteries and environmental advantages compared to gas peakers.
Sahwat Roy, Parikhit Sinha and Syed Ismat Shah Assessing the Techno-Economics and Environmental Attributes of Utility-Scale PV with Battery Energy Storage Systems (PVS) Compared to Conventional Gas Peakers for Providing Firm Capacity in California Energies 2020, 13(2), 488; 19 January 2020
Today it is more economical to build new renewables generation sources than to run existing coal or to build new natural gas plants. By 2032 it is predicted that the cost of building new solar + storage plants will be lower than the cost of running existing natural gas plants. This means that 90% of the currently proposed natural gas plants which would come online by 2032 will become uneconomic to operate by the time they are brought online. There is no need to wait until 2032 to see this begin to play out, however. In 2019, General Electric announced plans to close a 750 MW natural gas peaker that had 20 years remaining in its planned lifespan. One of the main reasons cited for that closure was a problematic 1-hour ramp up time, as opposed the immediate availability of solar + storage.
Shayna James Solar plus Storage is Displacing Natural Gas Peaker Plants Nuvation Energy Sept 8, 2020
As a whole, the US’s utility-scale battery power is set to grow from 1.2 gigawatts in 2020 to nearly 7.5 gigawatts in 2025, according to Wood MacKenzie, a natural resources research and consulting firm… Yiyi Zhou, a renewable power systems specialist at Bloomberg NEF, says that renewables combined with battery storage are already an economically viable alternative to building new gas peaker plants. Pairing electricity generation with storage works especially well with solar energy, which generally follows a predictable daily pattern. And, says Zhou, as more solar energy enters the grid, the cost of operating gas plants actually goes up. “That’s mainly because [gas plants] are forced to cycle on and off much more now because of solar penetration,” Zhou says. “This adds wear-and-tear, and shortens their lifetime.”
Cheryl Katz In Boost for Renewables, Grid-Scale Battery Storage Is on the Rise Yale Environment 360 Dec 15, 2020
As the Ontario Clean Air Alliance has pointed out, even now we have the capacity to import low cost hydro power from Quebec more than sufficient to replace the electricity produced by our natural gas plants.
With our existing transmission system, Ontario can import 16.5 to 18.5 billion kWh per year from Quebec. In 2020, Ontario’s net electricity imports from Quebec were only 4.1 million kWh. As a result, in 2020, Ontario could have increased its electricity imports from Quebec by up to 14.4 billion kWh. That is, our ability to import more power from Quebec in 2020 (14.4 billion kWh) was 1.5 times greater than Ontario’s total gas-fired generation in 2020 (9.7 billion kWh). –Jack Gibbons Chair, Ontario Clean Air Alliance
Quebec’s hydroelectric dams provide some of the cheapest power to be found anywhere on the continent. According to estimates released in October by the C.D. Howe Institute, in 2018 Quebec had the lowest normalized system costs of power of any province at $70 per megawatt hour, roughly half of the $143/MWh cost in neighbouring Ontario.
Matthew McClearn Canada’s clean power puzzle: Provinces sell to the U.S., but not each other Globe & Mail Nov 26, 2020
Ensuring Canadian provinces have equal access to the benefits of the emerging clean energy economy will require improving the infrastructure for interprovincial trade in electricity … At more than 60 billion kilowatt-hours (kWh) per year, exports of electricity to the United States dwarf interprovincial trade…
Ralph Torrie, senior associate with Sustainability Solutions Group and partner at Torrie Smith Associates
Celine Bak, founder and president of Analytica Advisors
Building Back Better with a green power wave Corporate Knights April 29, 2020
Further investing in upgrading/expanding our interties with Quebec would improve our ability even further to import power from Quebec and export power from Ontario to Quebec when we have surpluses.
The bigest advantage of improving our intertie capabilities, both with Quebec and Manitoba, however would be to harness the low cost storage potential of their hydro assets. These advantages were highlighted in the December 2017 House of Commons Report of the Standing Committee on Natural Resources: Strategic Electricity Interties:
… interties complement high penetrations of variable renewable electricity by enabling jurisdictions to trade surplus renewable generation with other markets when output is high, and to import electricity when output is low. Renewable energy sources like hydroelectricity, wind, solar, and tidal are naturally variable on different time scales… Using interties to increase the breadth of the grid helps smooth out the supply from the natural variability of these renewable energy sources, reducing the need for backup generation capacity and lowering overall costs. Interties are also beneficial for avoiding the curtailment, or spillage, of renewable electricity, and can enable the use of hydroelectric resources in British Columbia, Manitoba, Newfoundland & Labrador, and Quebec as energy storage reservoirs for neighbouring systems… Provinces and territories could avoid the use of more expensive peaking plants that are presently in place today or wouldn’t need to be in place in the future.
Furthermore, interties provide ancillary grid services that are valuable to grid operators. Such ancillary services are technical functions that are needed for an electric system to run reliably, including functions like providing voltage and frequency regulation, regulating flexible reserves to better manage the variable load of wind and solar resources, and building resilience into the grid so that the system can recover from outages more quickly.
Recent announcements in Quebec demonstrate the benefits of pairing renewables with hydro dam storage.
Beyond providing clean electricity amid growing demand, [Quebec’s hydro dams] can act like enormous grid-scale batteries, addressing the Achilles heel of intermittent, renewable energy sources such as wind and solar… there is the prospect of a growing need for low-carbon electricity — for export to the U.S. and elsewhere [Ontario?], and for use at home to power electric vehicles and other efforts to decarbonize…. according to Richard Carlson, director of energy policy for the national NGO Pollution Probe who has a long history of studying the electricity market, the [recently announced $600-million Apuiat wind power] project will also draw attention to the untapped wealth of Quebec’s existing hydroelectric infrastructure as a precious system of power storage and provide a working example for other parts of Canada, including British Columbia and Manitoba.
Don Pittis Why cheap wind power is making Quebec’s big, old dams more valuable as a ‘battery,’ say experts CBC News Feb 08, 2021
And one could easily add Ontario to the U.S. northeast in this article:
States in the northeastern U.S. can transition to low-carbon electricity at a lower cost by using hydropower reservoirs in Quebec, Canada, for energy storage, says a new MIT study…In a low-carbon future, the value of Quebec hydropower is maximized when used to balance and store renewable electricity generated from variable U.S. wind and solar resources. Adding cross-border transmission lines can facilitate the two-way power flows needed to leverage these benefits further, MIT says… expanding transmission lines between Canada and the U.S. can substantially decrease power system costs. The authors estimate that the addition of 4 GW of new transmission between New England and Quebec would lower the costs of a zero-carbon electricity system in these regions by 17% to 28%.
MIT study: Quebec hydro reservoirs provide valuable energy storage for U.S. northeast
Hydro Review Content Directors 2.18.2020
However, supporting the phase-out does not require us to focus solely on the case for improving inter-provincial interties. We have the technical skills and ingenuity to meet the challenges associated with building renewable power generation and energy storage assets at competitive rates right here in this province of Ontario. There are no technical barriers preventing the expeditious phase-out of green-house gas emitting gas plants in Ontario and no financial barriers that cannot be overcome. There is a incredible hunger by investors, both public and private, looking for investments that facilitate the transition to a low-carbon economy.
… as Bloomberg reported recently, last year saw nearly a trillion dollars pour into green bonds and ESG-focused investment funds, with more expected this year. As Moody’s noted in a February report, “the impact of environmental, social, and governance (ESG) issues in financial markets will accelerate in 2021 as the effect of government stimulus, decarbonisation policies and greater disclosure requirements overlap.”
Max Fawcett Erin O’Toole’s political future depends on carbon taxes National Observer Feb 16 2021
The Canada Infrastructure Bank’s Growth Plan Backgrounder Investment Plan to Grow the Economy and Create Jobs includes $2.5 Billion for Clean Power:
The CIB will invest in clean power generation, transmission and storage over the next three years. This $2.5B investment is a major step towards the CIB’s intention to invest $5 billion in clean power over the medium-term. The CIB’s interest in clean power will include renewable generation and storage. Also, investment in inter-provincial / territorial transmission can stimulate the advancement of clean power.
[This investment plan] could lead to involvement in one of the world’s biggest battery energy storage projects so far. The Oneida Energy Storage project in Southwestern Ontario is a planned 250MW / 1,000MWh system which would perform multiple applications to benefit the electricity system and help integrate large shares of renewable energy…The CIB signed a Memorandum of Understanding (MoU) earlier this month [January 2021] with Oneida Energy Storage LP, the joint venture (JV) company behind the project, formed by Canadian energy storage developer NRStor and Six Nations of the Grand River Development Corporation.
Andy Colthorpe Canada’s national ‘Growth Plan’ could invest in 250MW / 1,000MWh Ontario battery storage project 19 Jan 2021
According to many leading experts in sustainable finance interviewed by Canada’s National Observer, pressure from young activists sounding the alarm about the “climate crisis” has nudged green bonds out of the “niche market” and into the “mainstream.”
David McKie Green bonds are going from ‘niche’ to ‘mainstream’: Can Canada catch up? National Observer December 14th 2020
There are innovative financial instruments for private green-minded investors, like SolarShare and CoPower Green Bonds which originated here in Ontario. The City of Toronto itself has a Green Debenture Program in line with its TransformTO initiatives.
Toronto is one of the first municipalities to establish a Green Debenture Program in Canada – issuing its first green bond on July 18, 2018 and second green bond on September 9, 2019 . The City’s Green Debenture Program leverages the City’s low cost of borrowing to finance capital projects that contribute to environmental sustainability. Toronto’s climate action strategy, TransformTO, provides a set of long-term, low-carbon goals and strategies to reduce local greenhouse gas emissions and improve our health, grow our economy, improve social equity, and build resilience. Achieving net-zero emissions will require transformational changes in how we live, work, build and commute.
And the Government of Canada’s fiscal update of November 30, 2020 included this commitment:
To help finance the Government’s historic investments in green infrastructure and other green initiatives, the government is announcing its intention to issue the federal government’s first ever green bond in 2021-22.
There is ample evidence that employing an array of energy storage technologies can save Ontario ratepayers money. A recent report commissioned by Energy Storage Canada confirms this.
Energy storage can provide immediate, tangible savings, and benefits across Ontario’s power
system. Some of the savings are attributed to the inherent characteristics of energy storage, while others are a result of several unique characteristics of Ontario’s electricity market and regulatory structure. Over the next decade, … the introduction of at least 1,000 MW of energy storage can provide as much as $2.7 billion in total savings for Ontario’s electricity customers, and that the savings could reach upwards of $4 billion.
An example of savings would be reducing the cost to ratepayers of Cost Guarantee Programs.
The IESO operates a number of programs that guarantee the start-up and other costs for gas-fired generators to ensure these facilities are available to the IESO to maintain grid reliability. An increase in energy storage capacity in Ontario should reduce the need and reliance on guarantee programs…. Energy storage has well known capabilities to react to unexpected and rapid changes in demand or supply in real-time. Furthermore, unlike gas-fired generators, once energy storage has been charged in off-peak hours, it can react nearly instantaneously and requires neither start-up costs nor hours of time to reach a safe operating state. Gas-fired generators also require minimum run times, resulting in them operating for longer periods of time than may be economic, and adding to the SBG [surplus baseload generation] challenges.
Another example of savings is in regulating energy output from generators to match total load.
Energy storage resources can provide effective regulation services due to their fast-response capabilities. As mentioned, in Australia the Hornsdale Power Reserve – a 100 MW Tesla storage facility – has provided more accurate and responsive regulation service than traditional thermal generators. Additionally, it has been able to provide this service at a lower cost – as much as 91 per cent cheaper in certain instances. Similarly, in Ontario, the NRStor two MW Minto Flywheel facility has demonstrated a performance that is two-times more effective than traditional assets.
And most of all there are the Environmental benefits.
Energy storage resources can lessen the reliance on gas-fired generators in the short-term, while also reducing the amount of gas-fired generation capacity required in the long-term. In the short-term, energy storage resources can displace the use of gas-fired generators to address reliability concerns, and with lower start-up costs and less lead-time. In the long-term, energy storage resources can shift Ontario’s baseload generation to better align with energy consumption patterns… Ontario’s supply mix often generates surplus energy in hours when demand is lowest, while requiring use of higher cost gas-fired generating units in peak demand hours. Time-shifting of energy output can reduce the long-term need for these resources as part of Ontario’s overall supply mix. Less use of gas-fired generation will directly reduce carbon dioxide emissions and help Ontario meet its carbon dioxide emission reduction targets.
A Report by Power Advisory LLC commissioned by Energy Storage Canada Unlocking Potential: An Economic Valuation of Energy Storage in Ontario July 2020
We know the costs from wind and solar power have dropped dramatically over the last decade, and that battery storage has also dropped and continues to drop, and continues to attract a huge amount of investment. There are numerous battery technologies that can fulfill the need for dispatchable power. Pumped storage is one which OPG itself has operational at Niagara Falls.
Built in 1957, the 175-megawatt Sir Adam Beck Pump Generating Station (PGS) plays an important role in generating flexible emission-free power for Ontario and is the only facility of its kind in Canada…[able to displace] up to 600 megawatts of fossil fuel generation for nearly eight hours.
OPG Projects: Niagara Pump Generating Station Reservoir
But why is it the only one in Canada? Northland Power proposed building a pumped storage facility near Marmora many years ago.
It’s expected the Marmora Pumped Storage development would produce more than twice the energy produced by a similar project by Ontario Power Generation in Niagara Falls.
Mary Thomas Moves on Marmora Pumped Storage and funding cuts Quinte News Aug 29, 2019
And now TC Energy is getting into the game. This is the same company whose Keystone XL pipeline was cancelled by U.S. president Joe Biden on his first day in office, and the same company that sold off its Ontario gas plant interests to OPG last year.
TC Energy Corporation … announced that it has completed the sale of its interests in three Ontario natural gas-fired power plants to a subsidiary of Ontario Power Generation Inc. for net proceeds of approximately $2.8 billion prior to post-closing adjustments. The facilities include the 683-megawatt Halton Hills power plant, the 900-megawatt Napanee generating station and TC Energy’s 50 per cent interest in the 550-megawatt Portlands Energy Centre.
Globe Newswire TC Energy completes the sale of Ontario natural gas-fired power plants for proceeds of $2.8 billion April 29, 2020 Source: TC Energy Corporation
When private enterprise sells off its fossil fuel assets to governments, you know their long term viability is questionable and that Ontario taxpayers will eventually bear the burdon. OPG’s purchase has raised legitimate questions among policy analysts.
OPG had previously closed a transaction in August 2019 to acquire the remaining 50% interest in the 560 MW combined-cycle natural gas-fired Brighton Beach Generating Station. These four facilities [Brighton Beach, Halton Hills, Napanee and Portlands] will operate together under the Atura Power brand.
While the contracts for the newly acquired plants differ in length and term, it is possible that public ownership may allow the government to change the terms in such a way that make them more favourable for ratepayers. Renegotiation may not have been feasible under private ownership. Should this be the case, the government may be able to use this to help realize its campaign promise but at a cost to taxpayers.
The OEB has identified the potential for the abuse of market power and its effect on the integrity of the competitive market and has imposed safeguards. A larger question, however, is how the presence of a large Crown corporation, with public interest requirements, could affect the integrity and effectiveness of competition. Can a market in which a government-owned and directed company owns 50 per cent of total capacity achieve the outcomes of a workably competitive market, which is an objective of the IESO’s wholesale market and the Market Renewal initiatives?
Adam Fremeth and Brian Rivard Ontario’s multi-billion-dollar asset acquisition that nobody is talking about Ivey Energy Policy and Management Centre Jun 12, 2020
TC Energy’s proposed pumped storage project near Meaford would have 1,000 MW of installed generation capacity at a capital cost of $3.3 billion. Should they satisfy local environmental concerns, their project could be operational by 2028.
Many more Ontario clean-tech companies would stand to benefit from the transition away from fossil fuel electricity generation to renewables and battery storage. Here are just a few examples:
At first glance you may think a company like TROES (The Revolution of Energy Storage) located in Markham, may be too small to benefit from the utility scale battery requirements needed to replace our gas plants.
After more than a century, the limitations of the centralized energy grid have become an impediment to cleaner, less costly power… To overcome those limitations, we are seeing Distributed Energy Resources being deployed at locations much closer to the customer. The DERs are often linked with Energy Storage. Our goal at TROES is to enable mid-size customers to participate in this transition; we do this by bringing a state-of-the-art hardware and software energy storage combination to commercial, industrial and institutional power consumers.
“… TROES is an important member of our local innovation ecosystem and is meeting the growing global demand for sustainable energy solutions.” -Frank Scarpitti, Mayor of Markham
Renewable energy is transforming grid architecture whereby decentralized power assets play an increasingly important role.
The move from a traditional grid to the new smart, decentralized grid with bi-directional energy and information flow has accelerated in the past couple of years due to technological innovations, cost reductions, new business models, and enabling policies… As the world moves further into the energy transition on the path to a low-carbon future, smaller and decentralized power generation units will dominate the market.
-Sleman Saliba, global product manager for Energy Management with ABB Energy Industries
Opus One Solutions of Toronto provides software solutions for smart grids.
[Its] advanced and model-based software platform specifically designed to help distribution utilities maximize value from clean energy technologies, engage consumers, become more sustainable, and help lower total system costs. Pathways for a successful transition to a more sustainable energy system require more efficient use of existing assets and leveraging new forms of DERs such as EV charging stations, batteries and solar panels in distribution grids. .[Their] advanced analytics platform … is designed to drive the evolution of the electricity grid.
eCamion is another Toronto based company involved with energy storage projects.
[In 2016] Toronto Hydro … launched a prototype program to install a grid-scale, pole-mounted energy storage system…The new energy storage system was developed by Ryerson University’s Centre for Urban Energy and uses eCAMION technology… Toronto Hydro is continuously searching for innovative solutions for current and emerging grid issues. In Ontario, gas-fired plants produce more greenhouse-gas emissions than nuclear or hydro power. Energy storage, however, can reduce the need for gas-fired plants to be engaged during peak demand times, making it an attractive option for the Ontario-based utility… By deploying the new technology, Toronto Hydro is exploring how to extend the lifespan of some of its equipment through energy storage. As a result, it will help to defer asset replacement and reduce costs on the updating of infrastructure.
-Gary Thompson, supervisor – Engineering, Technical Standards & Energy Solutions at Toronto Hydro
Toronto Hydro Installs Pole-Mounted Battery T&D World Oct 11, 2017
Another GTA battery company is Missisauga based Electrovaya.
[The company] combines 20 years of Lithium-ion battery expertise and technologies to lead in the global energy transformation. Electrovaya’s Turnkey Solutions range from material handling to grid scale energy storage. Electrovaya is focused on contributing to the prevention of climate change through supplying the safest and longest lasting Li-ion batteries in the marketplace.
EV manufacturing is on the cusp of explosive growth and battery production will be an essential factor in that growth. Battery technology is advancing at a rapid pace. If Ontario is to maintain its share of auto industry production, it must keep pace.
Manufacturing of lithium batteries could boost the Canadian economy, but we are acting too little, too late. Battery technology is enabling important industrial transitions, from electrification of transportation to integration of renewable energy, and whoever controls the battery production will control the value chain. The battery supply chain … has been dominated by only a handful of countries, such as China, South Korea and Japan. Take raw materials — whatever their origin, China controls about 80 per cent of their chemical refining… Canadian raw materials need to be processed locally, instead of being sent to Asia. Our mining and refining industries need to build long-term relationships with battery manufacturers and automakers to secure stable supply contracts…The chain then continues with integration of refineries and electrode manufacturing… Next, it’s cell manufacturing, battery pack assembly and, ideally, connection with the local EV production. The more steps Canada develops at home, the easier it will be to bring in further foreign investment.
-Peter Kovacik A battery manufacturing blueprint for Canada Research Interfaces 5 Nov 2020
“Canada is rich in lithium, graphite, nickel, cobalt, aluminum and manganese, key ingredients for advanced battery manufacturing and storage technology. Having most of the highly-demanded raw materials, however, is not enough. Without an ecosystem that allows for the creation of a market and industry for batteries, Canada could miss the chance to position itself as a top competitor in the global electric vehicles battery supply chain.” Benchmark Mineral Intelligence director Simon Moores told the House of Commons on Monday [Feb 22]… “By producing the main component of EVs, Canada could secure more opportunities to assemble those vehicles and breathe new life into its vehicle sector.”
Cecilia Jamasmie Canada could be top player in global EV battery market — report Mining.com February 22, 2021
“There’s a long shadow between the promise and the execution, but all the pieces are there,” says Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. China is already working hard to become the “source of a new way” to power vehicles, President Joe Biden warned last week.”We just have to step up.” Canada has both the resources and expertise to do the same, says Volpe, whose ambitious Project Arrow concept — a homegrown zero-emissions vehicle named for the 1950s-era Avro interceptor jet — is designed to showcase exactly that. “We’re going to prove to the market, we’re going to prove to the (manufacturers) around the planet, that everything that goes into your zero-emission vehicle can be made or sourced here in Canada,” he says. “If you make investments in renewable energy and utility storage using battery technology, you can build an industry at scale that the auto industry can borrow,” Volpe says.
James McCarten Canada and the U.S. auto sector’s abrupt pivot to electric vehicles National Observer February 15th 2021
The City of Windsor and County of Essex have gotten the message and signed onto this effort.
The WindsorEssex Economic Development Corporation [responsible for advancing economic development to grow and sustain prosperity in the region] has submitted a bid to land an electric vehicle battery production plant that has been described as the most advanced Canadian effort to date to secure the country’s first such facility… The proposal, submitted this week, is for a proposed $2-billion plant that would employ 2,000 workers.
Dave Waddell Windsor pursuing $2B battery plant that would employ 2,000 Windsor Star Feb 26, 2021
Toronto based Havelaar is one company that will benefit from Ontario based EV industrial expansion.
Havelaar has developed a suite of trail-blazing technologies for zero-emission electric vehicles. Our innovative powertrain technology optimizes battery performance and significantly cuts charging time. This also allows for bidirectional charging, as well as charging directly from renewable energy sources like wind and solar.
Another local company with the potential to play a large role in our battery manufacturing ecosystem is Hibar Systems of Richmond Hill. It manufactures automated assembly systems including vacuum filling systems for Lithium-ion battery applications. It was acquired by Tesla in October of 2019.
EV batteries can also have a second life in utility power applications.
…lithium-ion batteries in EV applications… are designed for approximately a decade of useful life in most cases. Yet, these batteries can live a second life, even when they no longer meet EV performance standards… After remanufacturing, such batteries are still able to perform sufficiently to serve less-demanding applications, such as stationary energy-storage services… Based on cycling requirements, three applications are most suitable for second-life EV batteries: providing reserve energy capacity to maintain a utility’s power reliability at lower cost by displacing more expensive and less efficient assets (for instance, old combined-cycle gas turbines), deferring transmission and distribution investments, and taking advantage of power-arbitrage opportunities by storing renewable power for use during periods of scarcity, thus providing greater grid flexibility and firming to the grid. In 2025, second-life batteries may be 30 to 70 percent less expensive than new ones in these applications, tying up significantly less capital per cycle.
Hauke Engel, Patrick Hertzke, and Giulia Siccardo Second-life EV batteries: The newest value pool in energy storage McKinsey & Company April 30, 2019
And once the batteries do come to the end of their useful life, we have Missisauga based Li-Cycle, North America’s largest Lithium-Ion battery resource recycling company.
By solving the global end-of-lifecycle lithium-ion battery problem, [they] create a secondary supply to both meet the demand for critical battery materials and ensure a sustainable future for our planet.
Pumped storage and lithium-ion are not the only feasible battery storage solutions according to the panelists at a recent digital roundtable, “Energy Storage — Batteries vs Long-Duration Technologies”.
If you believe that lithium-ion batteries and pumped hydro are the only viable energy-storage options and that long-duration storage technologies are a long way from commercial reality, think again. Both liquid-air and the thermal solutions … use off-the-shelf equipment that do not degrade in any way — unlike lithium-ion batteries — and are said to be cheaper on a per-MWh basis at grid scale…The panellists agreed that one of the main challenges of the long-duration storage market is a lack of knowledge about the sector from policymakers and grid operators in many countries — and a lack of favourable regulatory frameworks.
Leigh Collins Long-duration energy storage set for ‘very steep’ growth as sector enters commercial phase Recharge News 19 February 2021
And we also have local companies involved with long term energy storage.
Founded in 2012, e-Zinc is a Toronto, Canada, based corporation that has developed a breakthrough electrochemical technology for storing energy in zinc metal. This low-cost, flexible, and long-duration energy storage solution will provide the platform for the world’s energy markets to be fully powered by renewable energy, enabling a zero-carbon energy future.
Here is part of a recent email conversation I had with Tom Rand, Managing Partner of ArcTern Ventures – a privately-backed venture fund focused on delivering next-generation clean technology at scale – and author of the book: Climate Capitalism: Economic Solutions for a Planet in Crisis:
…Would companies like Hydrostor and possibly Morgan Solar benefit if the Ontario government committed to phasing out gas fired plants for electricity generation? What role could Hydrostor play in replacing our dispatchable power requirements?
Hi Eric – for sure, it’s right up Hydrostor’s alley. OPG and Hydorstor are currently working on a large storage facility in Ontario that would eliminate the need for nat gas … T
Toronto based, Hydrostor has impressive Advanced Compressed Air Energy Storage (A-CAES) technology.
… it provides long-duration storage like pumped hydro, but has the key advantage of being able to be flexibly sited where the grid needs it, allowing the targeting of high-value (and immediately available) grid applications like transmission deferral and fossil plant replacement. The technology operates very similarly to a gas plant but is entirely non-emitting, is much more cost-effective than batteries at scale with a 50+-year asset life and is ideally suited to providing the long-duration storage resource necessary for decarbonizing the grid.
With the completion of the Toronto Island Demonstration Facility in 2015, Hydrostor developed the world’s first, grid connected adiabatic-CAES facility with utility host Toronto Hydro.
The Goderich A-CAES Facility, located in Goderich, Ontario, Canada, is the world’s first commercially contracted Advanced-CAES facility. The plant is contracted by Ontario’s Independent Electricity System Operator (IESO) for peaking capacity, ancillary services, and full participation in the merchant energy market to support grid reliability.
And we shouldn’t forget the potential of geothermal power, that leverages Alberta know-how.
Calgary based Eavor’s technology differs from other forms of geothermal in that it is a scalable “go anywhere” solution, harvesting geothermal heat to generate dispatchable power with zero emissions.
In addition to Eavor-Loop’s™ environmental benefits, the consistency of its heat harvesting gives it the potential to directly replace the traditional forms of baseload power such as coal and nuclear. The dispatchable nature of its design also makes Eavor-Loop™ a form of energy storage and thus singularly complementary to intermittent power sources like wind and solar.
GlobeNewswire Global energy majors lead pivot to Eavor’s geothermal solution with USD$40 million investment Source: Eavor Technologies Inc. February 16, 2021
Eavor believes it will be able to provide gigawatts of baseload and dispatchable renewable energy anywhere in the world for less than $50/MWh by the end of the decade, making its technology cost-competitive with natural gas and coal. And it has already proven its concepts in a pilot project, Eavor-Lite, that has been operating in Alberta, Canada, since last December.
“There’s been an equally rapid reduction in drilling costs as there has been in PV cells and wind turbines, which has made what we’re talking about, which is a hell of a lot of drilling, actually economic once you combine it with our innovations.” -John Redfern, Eavor CEO .
Leigh Collins Unlimited, on-demand renewable energy anywhere in the world — is Eavor-Loop climate change’s holy grail? Recharge News 27 October 2020
So what we need to do is create a virtuous cycle. It starts with a committment to phase out gas fired power plants in Ontario. This will increase demand for zero-carbon renewable energy and dispatchable battery backup power, stimulate more R&D and commercialization efforts to supply the battery solutions necessary to meet that demand. Innovation, creating an industrial eco-system for battery production and utilization along with economies of scale will drive down prices, increase demand and create the business opportunities and the employment opportunities we will need in this rapidly evolving economic environment. Most of all it will create a future of hope for our younger generation – a hope that we can overcome the obstacles to achieving a livable world that rapidly reduces GHG emissions and stabilizes our global climate system.
Major steps in human progress did not begin with a cost analysis. The Manhattan project achieved profound results in an amazingly short time-frame. Sending a man to the moon and China’s decision to invest heavily into the production of solar panels – these were all national goals that transcended short-sighted cost analyses. In hindsight who can deny that these projects not only achieved their goals, but also provided spin-off benefits far exceeding their initial costs. And did anyone hesitate to take action against the coronavirus pandemic and pour every effort into producing vaccines on a startlingly rapid timeline because of what it might cost? No, because it was needed to save lives. Let us not allow penny-wise thinking lead us into pound foolish decision making. The more we hesitate in decarbonizing the economy, the more it will cost us down the road, both in dollars and in lives.