CASE STUDY
Fortune 500 Manufacturer
Location
Ontario, Canada
Facility Type
Manufacturing Facility
Applications
Navigate Global Adjustment incentives, Automate wholesale market participation, Identify the economic electricity rates, Forecast & reduce peak demand
Leveraging the Industry’s Best AI to Solve Operational and Financial Challenges from Ontario’s Global Adjustment
Like many industrials in Canada’s leading manufacturing province, the company was spending upwards of two-thirds of its facility’s electricity bill on charges from Global Adjustment (GA), Ontario’s mechanism for recovering costs associated with meeting peak electricity demand.
Over time, GA has grown substantially as a share of Ontario customers’ electricity costs.. Because a customer’s GA costs are based on electricity use during the province’s five highest annual peak demand hours, organizations can drastically cut costs by reducing demand in those hours.
Challenge
For customers wanting to respond to peak events, the first challenge is knowing when they will occur. In this manufacturer’s case, staff were manually curtailing the facility’s electric load, which regularly exceeds 10 MW, in response to peak predictions from the Ontario Independent Electricity System Operator (IESO). But those predictions had become less reliable, and on some days a peak wouldn’t occur. On other days, curtailment efforts didn’t match peaks.
Moreover, as a thermally driven manufacturer whose equipment couldn’t be turned off and on quickly, curtailment proved especially cumbersome. Each time the facility curtailed power, furnaces had to be manually turned down, disrupting production for the duration of an expected peak. It was a lot of effort, and a significant opportunity cost, if a peak didn’t occur.
Solution
With energy costs climbing despite its best efforts, the manufacturer began to consider energy storage. An unacceptably large share of the company’s annual electricity costs was being determined by five unknown hours of the year. With so much riding on those hours, an energy storage provider’s ability to predict and respond to system peaks was critical to the manufacturer.
After evaluating several vendors, the client chose Stem for exactly this reason. Stem offered the industry’s best AI, Athena™, which has operated the world’s largest energy storage network for a decade. Stem’s size and financing capabilities also impressed, and a visit to Stem’s headquarters – including an in-person demo of our Network Operations Center (NOC) and meeting our team of data scientists – confirmed that Stem was “the real deal.”
Peak prediction in Ontario is unusually difficult. Since many customers use the IESO’s publicly available forecasts to curtail loads, this directly impacts system-wide demand and changes the timing of when peaks occur. Athena’s forecasting and real-time monitoring capabilities allow it to accurately predict peaks – even when the IESO doesn’t.
Athena’s predictive analytics combine tens of thousands of historical, forecasted, and real-time data points, including 5-minute IESO market data and local and provincial weather forecasts, to optimize dispatch of Stem battery systems. Given the importance of peak prediction, Athena leverages multiple forecasts and continually analyzes actual vs. forecasted peaks to further hone its accuracy.
Results
In addition to identifying and installing the right storage solution for the client – a battery with just over 8 MWh capacity – Stem actively coordinates with them around likely peak hours in order to achieve maximum energy savings. On July 5, 2019, the combination of Stem’s battery system and the client’s own curtailment efforts reduced the facility’s electricity demand to just under 1 MW – about 90 percent below its typical load.
Additionally, Stem has become a trusted expert partner across the company’s energy initiatives. Our knowledge of tariffs and billing enabled them to identify the most economic electricity rate for this facility, and Stem has advised them more broadly on reducing high energy costs in other markets. Our full-time staff of customer representatives and network operations specialists provides consistent, ongoing support.
Customers choose Stem for many reasons beyond GA. In Ontario and elsewhere, our AI-powered energy storage can deliver crucial reliability improvements, providing resilient power during outages and enhancing power quality. For manufacturers and other businesses especially vulnerable to voltage sags, where even a single “blip” would be costly and disruptive, Stem’s intelligent energy storage is a crucial part of maintaining smooth operations.
Athena also automates participation in wholesale energy markets, enabling clients to earn revenues from providing a range of grid services – and requires only a simple software update when market programs change. Stem’s storage solutions also maximize the value of on-site solar generation and “future-proof” solar assets against potential changes in tariffs, requirements, and incentives.
Stem currently has more than a dozen Ontario customers, with plans to serve many more. Our responsive Toronto-based Ontario team includes project management, engineering, sales, and market development professionals.
As a longtime energy storage pioneer whose policy advocacy has helped catalyze storage markets across North America, Stem’s commitment to our customers extends far beyond any individual project. We actively engage with policymakers in Ontario and elsewhere to help ensure that promising technologies, like battery energy storage, receive appropriate compensation for their value to customers and the grid so they can continue to support our clean energy future.
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