As Canada forges ahead in its commitment to become 90% green by 2030, its most populous province, Ontario, has emerged as a frontrunner in the adoption of clean energy, leading the shift away from coal, purchasing renewable energy as well as long standing demand response (DR) participation. While this is in part due to sustainability goals mutually agreed upon between businesses and the government, another driving force comes from large energy users implementing innovation solutions to lower their energy bills.
Demand-based charges known as the Global Adjustment (GA) account for as much as two-thirds of electricity bills for large Ontario C&I customers. These charges are linked to a C&I customer’s consumption during the grid’s top five peak demand hours each year. Essentially, the more energy consumed by a business during these five one-hour intervals, the higher the GA charges they must pay.
For over a decade, Enel X has been helping Ontario-based companies with heavy energy footprints reduce these costly fees or earn revenue for reducing energy usage during peak demand periods, through clean energy solutions, like demand response. As technology has evolved, new clean energy solutions, like battery storage, have entered the market paving the way for existing DR customers to extract more value and enabling new customers, who are unable to reduce demand because of operational impact, the opportunity to benefit from DR participation.
Ontario’s Expanding Battery Storage Market
With battery storage systems, customers can maintain full operations and still benefit from significant electricity bill savings, as well as earn revenue from demand response participation. When businesses are looking to reduce electricity charges, the first step is to predict when the grid operator is most likely to experience peak demand. This is all done within the battery system, using cutting-edge machine learning techniques and Enel X’s software, DER.OS. When the software identifies a peak demand event, it can automatically transition a customer’s load onto its battery system. This allows the business to rely on stored energy as opposed to energy provided through the electrical grid.
By tapping into stored energy during these periods of high demand, the financial savings can be significant. A reduction in demand of one mega-watt across the hours that set GA charges will lower energy expenditures by more than a half a million dollars the following year.
From plastics manufacturers like Berry Global to food packagers such as Amhil North America and family-owned commercial apple orchards like Algoma Orchards, Enel X’s systems have enabled customers in Ontario to reduce energy costs without disrupting production or compromising the quality of its products.
As the business appetite for clean energy solutions in Ontario continues to grow, Enel X is positioning itself to meet that demand at an even faster pace. The company is currently constructing two 10 MW / 20MWh storage projects – and in light of the opportunity it sees for further scale - recently paired its industry expertise with the financial strength of private equity firm Ardian Infrastructure to deliver even more value for customers that will further accelerate the deployment of battery storage in Ontario.
Maximizing the Value of Storage Through Demand Response
The battery projects Enel X deploys in Ontario do far more than just peak demand management. Leveraging our role as the largest demand response aggregator in the province, and our proprietary DER.OS technology platform, Enel X storage projects also optimize energy consumption based on customer electricity tariffs and participate in demand response programs and markets.
Demand response programs pay business for reductions in consumption, when dispatched, that enable utilities and system operators to maintain a resilient and reliable electrical grid. A multitude of contributing factors this summer have further demonstrated the critical role of demand response in supporting the grid.
To help commercial and industrial energy customers return to full operations during the pandemic, the Ministry of Energy froze GA charges for most large C&I customers this year, essentially eliminating the need for those customers to reduce peak load during peak demand periods during this summer. When a heat wave rolled through the Province in July, demand was higher than usual, in part because many large energy users who would normally reduce demand to avoid high GA charges continued to operate at full capacity. This led the system to issue its first system-wide emergency in five years status twice this summer resulting in the need for the system operator, the IESO, to issue emergency actions for demand response. Enel X worked with its customers to dispatch 180 MW of critical demand response resources across more than 350 sites to minimize the strain on the grid, including our battery storage projects across the province.
In addition to battery storage and demand response, electric vehicle smart charging offers the potential to further support the Ontario grid. While charging, EVs have the potential to serve as distributed energy resources. In the US, Enel X partners with more than 30 utilities on EV charging programs that will provide critical insight into charging behavior for each utility as EV adoption grows. In California, Enel X has deployed a 70MW highly distributed virtual battery, which is essentially the aggregate capacity of our JuiceBox home charging stations, which participate in wholesale day-ahead and real-time markets, all while helping to balance grid demand. We also just wrapped up a smart charging program with Hawaiian Electric, where we saw an average demand response participation rate of over 90%, which is consistent with other utility programs.
Even without battery storage systems, businesses are able to qualify for demand response programs. For example, global tissue manufacturer, Kimberly-Clark, operates a mill in Huntsville, Ontario 24 hours per day. The mill works with Enel X to evaluate how it can maximize payments from IESO by reducing energy usage during demand response dispatches. Today, the mill has identified a system to perform standard equipment maintenance while simultaneously conserving energy through these events, helping it save more than $2.3 million since 2011.
As an early adopter of energy management technologies and services, businesses in Ontario are addressing the systemic change required for widespread clean energy adoption. These technologies are priming the city to become a successful energy ecosystem with the potential to set precedent throughout the global marketplace.