Ontario Energy Storage Basics from Enel X: What is the ICI? Part 1

The Industrial Conservation Initiative (ICI) is important for Ontario industrial energy users to understand.

In this two-part article, Enel X North America explains what the Industrial Conservation Initiative (ICI) is – and why it matters to industrial energy users in Ontario.

The Global Adjustment charge

For commercial and industrial (C&I) energy consumers in Ontario, the biggest energy cost driver is the Global Adjustment (GA) charge, a line item on the electricity bill that appears along with hourly energy market charges. For some customers, the GA can represent as much as 85 per cent of total annual electricity costs.

This cost is only controllable for customers that are designated as Class A and participate in the Industrial Conservation Initiative. Through the ICI, Ontario’s electric grid operator, the Independent Electricity System Operator (IESO), encourages large C&I customers to contribute to efforts to improve the reliability and efficiency of the electric grid.

For Class A facilities, GA charges are based on average peak electricity demand during the five one-hour periods when the electric grid saw its highest levels of demand throughout the year. This creates an opportunity. If you can anticipate when the grid is likely to reach its highest demand levels and reduce your facility’s demand from the grid before it occurs, you can reduce your facility’s GA charges for the following year. Those that reduce their average peak demand by one megawatt (MW) will save more than $500,000 in GA charges in the following year.

Reducing demand during these periods results in smaller, and easier-to-manage, peak demand levels on the grid, thereby reducing the need to build expensive new electricity infrastructure to prevent outages during these periods. The IESO estimates that Industrial Conservation Initiative participation reduced peak demand by more than 1,400 MW in 2017.

Only certain facilities can qualify as Class A customers, and eligibility varies based on industry and energy consumption:

• All facilities with an average monthly peak demand of five MW or higher are automatically considered Class A customers, and have the option to opt-out if they choose.
• All facilities with an average monthly peak demand of one MW or higher are eligible to be designated as Class A, but those between one MW and five MW need to opt-in to participate.
• Manufacturing facilities and certain agricultural businesses with an average monthly peak demand of 500 kilowatts or higher are also eligible and also need to opt-in to participate (assuming their average peak demand is lower than five MW).

Coming up in Part 2: Predicting system peak events and minimizing consumption.

To learn more about how Ontario businesses are leveraging energy-storage technology, read this whitepaper from Enel X, Understanding Ontario’s Energy Storage Opportunity.

For more information, contact Enel X.

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