By Robert Tremblay on January 19, 2024.
On the night of Jan. 13, something unprecedented happened in Alberta. Albertans received an emergency alert notification asking them to conserve electricity use as Alberta’s electricity system, operated by the Alberta Electric System Operator (AESO), was in a level 3 grid alert.
Extreme cold, which brings with it low wind, combined with a few unanticipated outages from natural gas generators, left Alberta on the cusp of relying on load shedding to maintain the stability of our grid. Just before the emergency alert was sent out, the last resource keeping us going was energy storage.
In the hours before the emergency alert, storage was playing a critical role for the grid, providing “operating reserves.” This means our 190MW of storage was standing by, ready to discharge in case the AESO needed them during an emergency or reliability event.
By charging during times of low demand and discharging in times of high demand, storage can optimize how electricity from our generators makes it to customers, relieving strain on the system in the process. As demand on the grid ticked up and Alberta’s generators were unable to keep up, storage resources were called on to fill in the gap.
Unfortunately, because of some of the legacy structures of our electricity market and regulations, storage is still a relatively nascent resource in Alberta and could only hold off the emergency alert for an hour or two. More energy storage will help Alberta meet peak demand, potentially avoiding the need for future emergency alerts.
Storage can also provide far more than just reliability, it is also a boon for affordability. Storage takes low-cost electricity, charging when demand is low or when renewables are plentiful, and discharges at higher priced times, such as when demand is high and renewable output is low. More competition during high-priced times brings down the cost of high-priced hours and stabilizes the cost of electricity, to the benefit of Albertans and our economy.
Other provinces have recognized these benefits and are acting to enable investment in storage, at scale.
Ontario is building more than 2500MW of battery storage to meet critical capacity needs while ensuring Ontario’s clean electricity advantage is maintained. Going further, Ontario is advancing long duration storage projects like the Ontario Pumped Storage Project and Marmora Pumped Storage Project.
Longer duration storage assets provide unique reliability benefits with the ability to run for long periods of time.
Ontario has a diverse grid with a variety of resources on it: Nuclear, Gas, Renewables, Hydro and more.
Storage works well with all these resources. Indeed, much of the world’s existing pumped hydro storage was built in the 1970s and 1980s to provide a flexible complement to nuclear power, which isn’t meant to ramp up and down. Storage can optimize all resources while providing electricity when it is needed most, and Ontario’s pursuit of energy storage exemplifies this.
Nova Scotia is investing in up to 400MW of storage, which will help it develop its behemoth offshore wind resources and ease its transition off coal power. This is especially significant considering the smaller size of the province, as the result will be even more storage per capita than Ontario.
Even our neighbours in Saskatchewan are building a 20MW battery near Regina.
Alberta can realize these benefits, too, but the legacy structure of our system inhibits the amount of storage on our grid. Storage is currently charged as both a load and generator, leading to it being allocated very high system costs to operate. This does not accurately reflect how storage uses the grid, as unlike load or supply, storage isn’t adding new consumption or new energy into the system, but it can optimize the system for both. We see other markets around the world acknowledging this through substantial investments in storage.
Alberta has done some good work toward incorporating storage with the passing of the Modernizing Alberta’s Electricity Grid Act in 2022, otherwise known as Bill 22. It acknowledges that storage is a unique resource, distinct from load and generation. Unfortunately, this legislation is not yet proclaimed and implemented.
However, the fact remains energy storage is a critical part of Alberta’s grid, now and in the future. The challenge moving forward will be updating legacy rules and structures to liberate the development of storage in our electricity market.
With a few relatively simple changes to how storage is treated, investment in storage can be supercharged. Implementing Bill 22 and creating a cost allocation for energy storage resources are not the only things to be done, but would accomplish much, and can be done right now.
Storage isn’t the only part of a reliable grid, but it is a crucial piece. With the stakes for creating a reliable, affordable, and sustainable grid this high, we can’t leave anything on the table.
Robert Tremblay is a Calgary-based professional engineer and the policy manager at Energy Storage Canada.