Energy Storage Canada welcomes Budget 2023’s Investment Tax Credits for Energy Storage & Recapitalization of the SREP Program
2023 Federal Budget expands support for clean technologies through a refundable up to 30 percent ITC, which will contribute to Canadian markets’ ability to maintain global competitiveness
FOR IMMEDIATE RELEASE
28 March 2023
Today’s Federal Budget, A Made in Canada Plan, builds upon the 30% Clean Technology ITC introduced in the 2022 Fall Economic Statement by introducing a 15% Clean Electricity ITC which expands eligibility to non-taxable entities. This initiative is introduced in tandem with a commitment to recapitalize the Smart Renewables and Electrification Pathways Program (SREP), as well as additional ITCs for clean hydrogen and clean technology manufacturing. Taken together, these measures are a vital step to ensuring Canada’s energy storage market remains globally competitive throughout the ongoing energy transition and secures the necessary deployment of decarbonization technology to support Canada’s path to net-zero.
“The announcements in today’s Federal Budget related to Clean Technology ITCs & the SREP program are critical steps to ensure Canada’s energy storage sector keeps pace with the United States and the global market,” said Justin Rangooni, Executive Director of Energy Storage Canada. “Canada’s ability to meet its ambitious net-zero targets by decarbonizing its electricity grid is dependent on the flexibility and reliability that a diversity of energy storage technologies of varied durations can provide.”
“Our recent report, Energy Storage: A Key Pathway to Net-Zero in Canada, identifies a minimum of 8 to 12 gigawatts of energy storage is needed for Canada to reach its goal of a 2035 net-zero electricity grid,” said Rangooni. “Today’s announcements represent a definitive step in the right direction for Canada’s federal government, but it’s still a wide gap to close to meet the country’s goals. To that end, we look forward to continuing to work with the Federal Government, the provinces, and our members to make that a reality.”
Key Facts:
ESC recommends that adders relevant to the Canadian context also be included in the development of the ITC, such as, providing additional percentage for energy storage projects located on, or built-in partnership with, Aboriginal or First Nation communities, as well as northern and remote communities. To further differentiate the Canadian ITC, an adder for Long-Duration (8 Hours+) Energy Storage (LDES) should be implemented. Long-duration storage is especially critical for achieving net-zero goals, however current revenue mechanisms in Canadian energy markets do not sufficiently value long-duration assets. ESC recommends an adder of 20% for Long-Duration Storage technologies.
The U.S. ITC has been identified as one of the most important factors in the steady growth of the U.S. solar industry over the past decade and a half. And it is anticipated that a 30% energy storage ITC would increase U.S. storage deployments by 24% over the next five years.
A 2022 report commissioned by Energy Storage Canada, Energy Storage: A Key Pathway to Net Zero in Canada, identified the need for a minimum of 8 to 12 GW of installed capacity for Canada to reach its 2035 goal of a net zero electricity grid. Moreover, the report found that while the supply structure of each province differs, energy storage can play a critical role in all Canadian provinces, meeting demand needs and optimizing the effectiveness of existing generation transmission, and distribution assets.
Major recent milestones for energy storage project development in Canada include: a competitive procurement for 2,500 MW in Ontario; the capacity of projects in the queue to connect in Alberta exceeding 2,500 MW; the 250 MW Oneida Energy Storage project moving toward commercial operation in Ontario; NB Power soliciting proposals for 50 MW of energy storage projects in New Brunswick; and the recent provincial budget funding and amendments to the Electricity Act in Nova Scotia which will enable grid-scale battery contracts and procurements. There are also many Long Duration Energy Storage (LDES) technology-based projects advancing in Canada such as compressed air, pumped hydro and other non-lithium ion battery chemistries.
About Energy Storage Canada: Energy Storage Canada is the only national voice for energy storage in Canada today. We focus exclusively on energy storage and represent the full value chain of energy storage opportunities in our own markets and internationally. Energy Storage Canada is your direct channel to influence, knowledge and critical industry insights. For further information visit: www.energystoragecanada.org.
For additional information:
Leone Benson King, Communications Manager, Energy Storage Canada,
(613) 818-3849, leone.benson.king@energystoragecanada.org
Find Energy Storage Canada on social media: