Ontario Energy Storage Basics: What is the Industrial Conservation Initiative, and Why Does it Matter?

Ontario Energy Storage Basics: What is the Industrial Conservation Initiative, and Why Does it Matter?

Table showing peak hourly consumption for the month

These thresholds pertain only to individual facilities. Organizations with multiple facilities cannot combine average monthly peak demand across multiple buildings to qualify as a Class A customer.

As GA costs have risen in recent years, the ICI has received more attention. For years, eligibility for Class A customers was limited to facilities with at least 5 MW in average monthly peak demand. Then, in 2017, the Ontario government lowered the threshold to 1 MW for all customers—and 500 kW for manufacturers and select agricultural industries—extending the incentive to many more of the province’s largest energy consumers.

In recent years, predicting when system peak events occur has become more difficult. As noted in a previous article, the IESO’s model for predicting peak demand levels on the grid missed two of the five events that factored into GA charges last year.

In addition to predicting system peak events, ICI participants need to minimize their consumption from the grid during these periods. Some facilities are able to accomplish this through energy reduction alone, such as shutting down non-essential lighting or other equipment, or re-scheduling maintenance that requires downtime for energy-intensive equipment.

This is also why so many Ontario businesses have adopted energy storage. Installing an energy storage system enables these customers to store the lowest-cost electricity on-site and consume it at times when relying on the grid is most expensive, including when GA charges are calculated. This also eliminates the need to reduce energy consumption, providing access to power for critical equipment during these periods.

Whether through energy reductions or storage—or even a combination of the two—Ontario businesses have had success in tackling GA charges through this approach. Last year, Ontario C&I energy consumers participating in Enel X’s system peak predictor program saved nearly $13 million on GA charges alone.

Today’s Ontario businesses face some of the highest electricity costs in North America. Thanks to the ICI, they have options to protect themselves from these costs.

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