Global Adjustment (GA) is Ontario’s mechanism for recovering costs associated with meeting the province’s long-term energy needs, and includes investments in infrastructure as well as conservation programs. Over time, GA costs have grown to account for a large portion of businesses’ annual energy costs.
For large, Class A business energy users, Ontario offers an economic incentive, known as the Industrial Conservation Initiative, for reducing energy use in the five highest demand hours of the year. Businesses can therefore significantly reduce their annual energy spend if they can successfully reduce demand in just those five hours.
The challenge for businesses is twofold. First, it can be very difficult to predict when those five peak hours will occur. Peak predictions, by the grid operator and others, aren’t always reliable, in part because market participants shift energy use in anticipation of a peak. In a worst-case scenario, a customer drastically lowers demand in one hour only to have a peak occur in another.
The other challenge is the operational disruptions that can occur in pursuing large, time-sensitive cuts in energy use. For certain manufacturing and other businesses, manual curtailment efforts can dramatically impact operations and prove costly if a peak doesn’t occur.
Battery storage has therefore emerged as a key solution for Ontario businesses seeking to lower their GA costs. Using batteries instead of the grid enables businesses to maintain seamless operations during peak periods, and batteries can also be combined with manual curtailment to maximize savings. And energy storage is a clean resource compared to other load reduction technologies such as diesel or natural gas generators.
In 2021, Canada introduced a new program to vastly expand the country’s use of clean energy resources. Called the Smart Renewables and Electrification Pathways Program (SREP), it provides up to C$964 million through 2025 for renewable energy and grid modernization projects. The SREP incentive is structured as an upfront payment that covers up to 30% of total project costs.
Energy storage projects are eligible for SREP funds if they exceed 1MW/ 2MWh and provide Operating Reserves to the provincial grid operator, IESO. Projects larger than 4MWh can also participate in IESO demand response. SREP funds are available to projects across Canada and provide a compelling additional incentive for Ontario businesses seeking to reduce GA charges.
In Ontario, peak prediction is key to capturing bill savings because energy reductions that occur outside of system peaks don’t reduce a business’s GA costs. Publicly available forecasts, while broadly instructive, can be inaccurate. Energy storage providers can provide decisive value to businesses when their software accurately predicts system peaks and automates battery discharge accordingly.
Combining energy storage with manual curtailment efforts can maximize energy bill savings. Coordinating closely with an expert energy storage provider can achieve impressive results. One Stem customer in Ontario has managed to reduce electricity demand by roughly 90% below its typical load during peak events.
Businesses that benefit most from GA cost reductions are often interested in the additional services battery storage can provide, including backup power and voltage support. For manufacturers and other businesses especially vulnerable to outages or voltage sags, energy storage can be a crucial part of maintaining smooth operations.
Stem is a global leader in AI-driven energy storage systems, with more than a decade of experience partnering with organizations and developers to realize hundreds of successful projects. Founded in 2009, Stem pioneered behind the meter (BTM) energy storage as a solution to help businesses save on energy costs. Our industry-leading Athena® AI software leverages over 40 different input data streams to make the smartest decisions about Ontario peak dispatch.
If you’re interested in lowering your GA costs and capturing SREP funding for your energy storage project, contact Stem today. Our experts would be happy to answer your questions and design a solution that works for you.
Featured Case Study: Manufacturing Facility
Facing ever-rising energy costs and a limited ability to control them, a Fortune 500 building materials manufacturer contacted Stem about installing battery energy storage at an Ontario facility. Stem supported their application for Ontario’s Global Adjustment program with project lifecycle support – including system procurement, permitting and interconnection advising, operations and maintenance reporting, program enrollment and incentive management.Read More
5.3MW / 8.5MWh