Varcoe: Surge of power storage coming, but more needed to keep lights on in Alberta's grid

At a Calgary conference held by the Canadian Renewable Energy Association, industry players examined the future of energy storage in the province as a large number of proposed projects have entered the approval lineup

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On a bitterly cold night last January, cellphones across Alberta sounded an alert as the province was dangerously close to experiencing rotating power outages.

Albertans cut consumption and avoided outages in the dead of winter, but one of the newer developments in the provincial power system — energy storage — played a small but pivotal role in ensuring the electricity stayed on.

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As the province overhauls rules for the electricity market and sees more renewable power added to the generation mix, policymakers, developers and the grid operator see a bigger role for storage in Alberta’s future.

“We were the last line of defence called and we had, at the peak, 126 megawatts of our assets discharging at one time into the grid, right about 15 minutes before the alert,” said Mike Schoenenberger, a vice-president with Enfinite, a Calgary company that operates nine lithium-ion battery storage facilities in Alberta.

“We had them running until there was literally nothing left. And at that time, enough people had turned off their Christmas lights and the load came back down . . . So we provided that buffer, but it was close.

“We need more (storage), based off those events.”

The question is, what’s the best way to make that happen?

At a Calgary conference on Wednesday held by the Canadian Renewable Energy Association, industry players examined the future of energy storage in the province as a large number of proposed projects have entered the approval lineup.

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According to the Alberta Electric System Operator (AESO), there are 190 megawatts of energy storage projects now operating and 170 MW of projects under construction.

That’s just the tip of the iceberg.

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Another 435 MW of storage projects have received approval from the Alberta Utilities Commission, and 5,673 MW of other developments have been announced.

While not all of those initiatives are expected to proceed, it’s a clear sign of the interest level in storage as the electricity system transforms and federal and provincial governments have adopted net-zero emissions targets.

The first utility-scale storage project in Alberta, known as WindCharger, was developed by Calgary-based TransAlta Corp., with the $14.5-million development starting up in 2020.

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Located northeast of Pincher Creek, the lithium-ion battery storage facility can store electricity from the company’s nearby wind farm and discharge it when needed, capable of distributing 10 megawatts for up to two hours, providing up to 20 MWh of total storage capacity.

As Alberta remains a leader in attracting new wind and solar generation in Canada — even after last year’s pause on approving new projects — storage is expected to play an important part in balancing the intermittent nature of such resources.

However, it’s essential to ensure the growth in storage occurs without negatively affecting consumers through higher costs, said Alberta Utilities Minister Nathan Neudorf.

“If we had, let’s say, half of the proposed (projects built) and we end up with 3,000 megawatts, that’s a pretty significant amount of storage to have online, and at the right places, (it) can really help,” he told reporters.

Nathan Neudorf
A 2023 file photo of Utilities Minister Nathan Neudorf, who oversaw the province’s handling of an AESO grid alert on Saturday, Jan. 13, 2024. Photo by David Bloom /Postmedia

Storage is already playing a major role in other markets with significant renewable generation, with 6,500 MW of storage built in Texas and 10,000 MW in California, noted Canadian Renewable Energy Association CEO Vittoria Bellissimo.

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The U.S. Energy Information Administration forecasts that battery storage capacity south of the border will nearly double this year.

Earlier this month, Ontario wrapped up the largest battery storage procurement process in Canada and, once built, its storage fleet will have a total capacity of more than 2,900 MW. The Ontario government noted that its price per megawatt of storage fell 24 per cent from a similar process in 2023.

Battery costs have dropped by more than 90 per cent since 2010, Bellissimo said, while pumped hydro and compressed air are other potential ways to store energy for later use.

“We’ve had some problems in our energy market this year. You recall the text messages that were sent to everybody in January and we had rotating outages in April. If we’d had an additional 300 MW of energy storage, none of those problems would have happened,” she added.

“Other markets are already moving on this and clean energy solutions are a global competition.”

Vittoria Bellissimo
Vittoria Bellissimo, CEO of the Canadian Renewable Energy Association. Chris Varcoe/Postmedia

Nicole LeBlanc, AESO’s vice-president of markets, pointed out storage can offer reliability to the grid and respond quickly, providing a few hours of energy during critical moments.

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“Storage did help in that event in January where it enabled us to have confidence to import at higher levels than we otherwise would have, because of the risks we would have faced if the intertie (lines) tripped,” she told reporters.

“As we look forward — and having decarbonization targets by 2050 — renewables are going to play a significant part of the mix. And to support that variability, storage will hopefully play a role.”

While there are technical and economic challenges, one of the biggest barriers to building more projects is the restructuring of the province’s energy-only market and the uncertainty it creates.

Those changes are expected to be implemented by the province by 2027.

“The investor looks at the market and says . . . we can’t take a position in investing in Alberta until the government stops meddling with the market,” said Claude Mindorff with Pace Canada, which is working on proposed projects in Alberta.

“We’d like to make the investment. We need the investment climate where it needs to be.”

Chris Varcoe is a Calgary Herald columnist.

[email protected]

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