Understanding Ontario’s energy-storage opportunity with Enel X: Part 2

Enel X solutions solve many energy challenges.

In this four-part article, Enel X North America discusses how electricity costs can be managed with energy storage in Ontario. This second part examines how businesses in the province can achieve reduced electricity costs with the Industrial Conservation Initiative (ICI) and storage. Read Part 1.

How Ontario businesses can reduce electricity costs

To help reduce costs, Ontario’s grid operator, the Independent Electricity System Operator (IESO), established the Industrial Conservation Initiative (ICI). Since 2010, Ontario businesses that qualified for the ICI were assessed an annual Global Adjustment (GA) rate based on their contribution to peak demand on the grid. For these companies, the GA charge is assessed based on each building’s Peak Demand Factor, which is calculated based on its demand at the top five peak demand hours for the Ontario grid every year. The more they contribute to the biggest peak demand events, the higher their GA charges will be.

Opting into the ICI created an opportunity for these buildings to reduce their annual GA charges. If you can predict when peak demand is most likely to occur and temporarily reduce your demand for that period, you can reduce your GA charge. These practices also have a positive impact on the grid. The IESO has claimed that these practices “are having the effect of flattening the peaks.”

In 2017, Ontario expanded eligibility for the ICI. Whereas the program was previously limited to buildings with an average peak demand of 5 megawatts (MW) or greater, the ICI is now open to all buildings with a peak demand of 1 MW or greater, as well as those in select industries with a peak demand of 500 kilowatts or greater. However, while expanding ICI eligibility opened this opportunity to far more Ontario businesses, it did not address the two main challenges to fully capitalizing on the opportunity to manage GA costs: accurately predicting when peak demand will occur on the grid, and reducing demand in a significant way without disrupting building operations.

Energy storage can solve these challenges. When combined with insight into trends on the Ontario grid, businesses can seamlessly transition a portion of their building’s load onto an energy-storage system at the times when system peak is most likely to occur throughout the year. By charging the battery at times when power is at its least expensive and discharging during likely peak events, businesses can minimize exposure to GA charges without shutting down critical equipment in their facilities. Their buildings will experience no difference in energy consumption, but their GA charges will decrease as if they did. Businesses that reduce their peak demand factor by 1 MW stand to save more than $500,000 in GA charges in the following year.

Coming in Part 3: How Enel X helped an Ontario orchard maximize energy savings.

To learn more, contact Enel X.

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