Energy storage key to resilient electricity grids of the future

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Jurisdictions across Canada are moving to integrate technology that will store energy for future on-demand use. Commonly referred to as energy storage (ES), these technologies take various forms and serve a wide range of functions within electricity grids and beyond. In this post, we discuss a few of the most significant ES applications in the context of energy transition and highlight recent regulatory developments from Alberta which are anticipated to aid the uptake of ES within the province’s interconnected electric system (AIES).

Technologies and applications

Various technologies can be used to store energy. These include batteries (both solid state, which use solid electrode material like lithium, and flow batteries that store energy in electrolyte liquids), pumped hydro,[1] hydrogen[2] and compressed air.[3] Not surprisingly, given the range of forms that ES can take, the Alberta Electric System Operator (AESO) and the Government of Alberta’s working definition of ES is technology-agnostic, describing ES as “any technology or process that is capable of using electricity as an input, storing the energy for a period of time and then discharging electricity as an output.”[4]

Globally, ES technologies are being considered and applied for purposes ranging from back-up supply, voltage and frequency support, energy price arbitrage (i.e., purchasing more energy during off-peak hours and discharging it during peak demand), operating reserve, load shedding and black start services, to non-wires solutions that defer or replace the need for building or expanding distribution or transmission systems.

As Canada transitions to a low-carbon energy economy, ES is anticipated to play a crucial role in enabling emissions reductions through integration with variable renewable energy sources. Examples of emission reductions supported by ES include the Cowessess First Nation’s renewable ES facility located in Saskatchewan, Canada’s first hybrid renewable energy system generating both solar and wind power and storing it in batteries, and FortisAlberta’s Waterton Energy Storage Project, which will combine battery ES and solar renewable generation to address reliability issues. In British Columbia and Qu├ębec, ES has been paired with hydroelectric power generation.

Regulatory developments in Alberta

Alberta’s push to integrate ES into the AIES was highlighted in 2019 with the AESO’s release of its Energy Storage Roadmap, which set out the AESO’s multi-year plan to facilitate integration of ES technologies into the grid, markets and associated regulatory and tariff regimes. In September 2021, the Alberta Utilities Commission (AUC) amended its Rule 007 governing facilities applications to include new application requirements specific to ES (battery projects in particular). The AUC is also currently reviewing the AESO’s recent bulk and regional rate design application, which includes modernizing its demand opportunity service rate to include ES. Meanwhile, the AESO’s review and consultation process for new rules to enable ES is ongoing.

In November 2021, Bill 86, the Electricity Statutes Amendment Act, 2021, passed second reading in Alberta’s legislature, proposing a suite of changes to provincial electricity legislation to enable ES integration. The proposed amendments are discussed in detail in our Osler Update.

Energy storage plays a key role in energy transition

Paired with renewable and low-carbon generation methods, ES technologies will be required to play a crucial role in transitioning to an electricity system that is both de-carbonized and reliable. Regulators and system operators are acting to support the integration of these ES technologies in recognition of their key role in Canada’s energy transition and in ensuring resilient grids with capacity to meet the demands of our changing climate. While there is yet work to be done in terms of both technological and regulatory advancement to support more widespread adoption and development of ES solutions within Canadian electricity grids, it appears clear that governments and electrical system operators are looking for ways to support such adoption and development.

[1] During high-demand periods, water is released from upper reservoir through turbines to generate hydroelectricity. Water is pumped from lower reservoir to recharge upper reservoir during low-demand periods.

[2] Surplus renewable electricity from solar and wind is used to create hydrogen through electrolysis during low-demand periods. Once produced, hydrogen can be used to generate power in stationary fuel cells, or deployed for various other purposes.

[3] Energy is stored by compressing and refrigerating air that is heated and released to discharge energy.

[4] AESO, Energy Storage Roadmap (2019) online: [PDF] at page 6.