Ontario’s Global Adjustment Program

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.