Smart Operation of Energy Storage Resources is Key to Industry Success

By: Cam Carver, President
October 18, 2023

The energy storage industry in Canada has come a long way in a short time.  When I led the founding of Energy Storage Canada (then Energy Storage Ontario) as its first Chair in 2012, our goal was to raise awareness of this emerging technology class and to advocate for a place in the electricity market for energy storage.  Through the work of Energy Storage Canada, system operators, and other stakeholders, much has been achieved in the past decade.  Today, energy storage is taking a front and centre position as a key energy technology that will help meet growing demand levels while enabling the decarbonization of Canada’s power grids.  To complete the success story of energy storage in Canada, the industry must now prioritize the smart operation of these unique resources to ensure they deliver on their full potential.

Every day at Workbench Energy, we provide market operations services to a wide range of grid assets in Ontario including front-of-meter energy storage plants, dispatchable loads, and gas-fired generators. Each resource class has its own set of contract structures, market rules, and IT interfaces with the system operator which, together with internal considerations, provide a blueprint for their operations.

Following recent and current procurements for front-of-the-meter energy storage plants in Ontario, large-scale energy storage systems will begin coming online in the Province in the 2025 timeframe and will continue arriving for years to come.  As it stands, an enduring model for the smart operation of these facilities will not be ready.  Energy storage systems will initially operate under the interim energy storage framework, as it does today, whereby energy storage is considered as both a dispatchable load for charging and a dispatchable generator for discharging.  While this provides “a” participation model, it doesn’t appreciate many of energy storage’s unique characteristics, such as a rapid response and quick duration capabilities, or state-of-charge status.  Energy storage operators will continue to operate under the interim energy storage framework beyond the launch of the Market Renewal Project (MRP), currently scheduled for implementation in mid-2025, with new added complexities of the new market design.  As currently planned, the focus of an enduring energy storage model will only be prioritized, planned, and implemented following the launch of MRP.

The reward of accelerating a smart enduring model for energy storage in-line with the launch of MRP is considerable.  New energy storage facility owners can invest with confidence in their IT integrations and long-term operating plans with less concern about the complexities of multiple market design changes in the early years of the projects.  The IESO can expect access to greater capabilities and more operational transparency from energy storage resources.  Energy storage market participants can integrate with the IESO with fewer manual interventions as current and planned IESO IT systems and rules don’t square with the realities of operating storage plants.  Ultimately, we need energy storage to deliver on its full potential from the beginning of the new market design so it can fully demonstrate its ability to drive down costs, improve system reliability, and operate to reduce emissions.   A smart and enduring participation model is critical to the success of the energy storage industry in Ontario and for shaping a future provincial power grid that will be a model for the rest of Canada and jurisdictions around the world.

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