Industrial Wind Turbines, Solar Combined with Battery Storage is the Path to Energy Poverty

Upcoming in our locale is a push by a renewable energy company (Capstone Infrastructure) to obtain the blessing of the municipality and its residents to accept a plan to erect a 300 MW battery storage facility.  We residents and municipal politicians will reputedly be told how a lithium-ion Battery Energy Storage System (BESS) will benefit the local community at an upcoming presentation.

Driving this push in Ontario is the Ministry of Energy who has recently directed IESO (independent electricity system operator) to secure 1,500 MW of “stand alone” energy storage! The foregoing is presumably related to the push for more renewable energy (wind, solar and biofuels) as the province falls in line with the full electrification mandates being imposed by the Trudeau led Federal Government and his Minister of the Environment and Climate Change Canada, Steven Guilbeault.

If Ontario’s Minister of Energy, Todd Smith had wanted, he could have easily pushed back as based on IESO’s 2021 Year in Review it shows Ontario’s generation from the electricity system was 92.5% emissions free and included exports of 17.2 TWh exceeding our gas and biofuels generation by 7.1 TWh. In other words, Ontario ratepayers’ total consumption could be considered fossil free had those exports included all of the natural gas and biofuels generated in 2021.

As if to point out the obvious, one should simply look at IESO data for November 21^st, as an example and note grid connected IWT (industrial wind turbines) delivered 70,100 MW with another 7,900 MW curtailed meaning they could have averaged about 66% of their capacity throughout the day. Those grid accepted and curtailed MW cost us Ontario ratepayers $10.4 million or around $149/MWh (14.9cents/kWh) and we exported almost 40,000 MW to our neighbours.  Exports in the first 20 hours of the day were at the price of $6.91/MWh as the market price or HOEP (hourly Ontario energy price) was as low as 0.00/MWh and peaked at hour 22 at $59.92/MWh.  What this demonstrates is we basically are giving away our surplus (emission free) generation for mere pennies of what we pay for it.

The question minister Smith should ponder is will battery storage reduce our generation costs or simply create wealth for the BESS owners?

BESS can allow IWT owners to double up on revenue

Anyone who occasionally looks at IESO data will quickly ascertain renewable energy such as the intermittent and unreliable IWT generation is, more often than naught, the reason why HOEP prices are as flat as 0.00/MWh during low demand hours. If those BESS can scoop up enough of that cheap power to charge their batteries, they are sitting on a gold mine.  When the HOEP goes up they can sell power acquired at higher prices such as the $59.92/MWh noted above or sometimes much higher.  If those BESS are owned by the same people who own the IWT generating that excess power, they can make even more money due to the “first-to-the-grid” rights they have embedded in their contracts! 

Should BESS contracts be awarded they will be doing what is commonly referred to as “energy arbitrage”.  In other words, they simply buy and store energy when its cheap (frequently at night) and sell/discharge it during the day when it is much more valuable!

A prior article of an existing IWT company in Ontario, coupled with their plea to add “battery storage” went into more detail pointing out the specifics of how it would generate increased revenue without benefiting ratepayers. This project is similar as while the proposed owner is not planning on locating the BESS project next to the several; IWT developments they own in Ontario; they will still be able to purchase the low-priced power via the IESO controlled grid and resell it for higher prices during high demand hours when the prices spike.

At the very least selling it to our neighbours in Michigan, New York and Quebec is a small revenue source but does help somewhat; in reducing costs to Ontario ratepayers. Who knows, perhaps, in the future, we will negotiate with those neighbours to receive “carbon credits” that can be allocated collectively to Ontario ratepayers and then sold, with the revenue generated from their sale simply applied to reduce our electricity costs! 

The foregoing sure beats having a BESS in our neighbourhood and having the possible concerns of a major high intensity fire as some BESS in other countries have experienced.