Ontario’s Economic Growth Will Need Long Duration Energy Storage (LDES)

By Justin Rangooni
Executive Director, Energy Storage Canada

After years of consistency, in the next three decades Ontario’s energy sector and its electricity grid are expected to undergo a substantial transformation, which of course leaves a lot of room for innovation. While all types and technologies of energy storage are seeing substantial innovation in their composition and application, long duration energy storage (LDES) is perhaps seeing more than others, because there are far fewer instances of LDES assets having been deployed or connected to major grids, apart from pumped hydro.

However, even with fewer instances of deployment to date, data indicates long duration storage is to be critical to the future changes to Ontario’s grid as the province, like many regions, prepares to secure two or three times its current generating capacity, while still achieving its ambitious decarbonization goals.

Changing the blend of resources supplying energy to the province, with an emphasis on non-emitting resources – including renewables like wind, solar, and hydro, new grid-scale and small modular nuclear assets, and emerging resources like hydrogen and geothermal – is going to be a major challenge. As we electrify heating and transportation, the frequently simultaneous demand for charging EVs or powering heat pumps is going to drive unprecedented levels of peak electricity demand that will compound the strain on our power grids.

As Ontario brings on more generation capacity, and electricity demand reaches new levels, the province will require a greater variety of energy storage resources to ensure Ontario has the power it needs when it needs it. Long duration assets – broadly defined as assets capable of discharging energy for a period of ten or more hours – will be a key component of this mix.

In fact, a recent report commissioned by Energy Storage Canada (ESC) and prepared by Dunsky Energy & Climate Advisors, identifies a minimum of 6 gigawatts (GW) of +10-hour duration energy storage starting in 2032, could be mitigate potential supply, planning and deployment risks and achieve savings between $11 billion to $20 billion compared to Ontario’s current transition plans.

Fortunately, in recent years the Government of Ontario worked closely with the Independent Electricity System Operator (IESO) to adopt an ambitious approach to regulatory and market reforms to enable the deployment of energy storage resources (ESRs). The province achieved a major milestone last summer with the IESO’s procurement of over 880 MW of energy storage capacity, the largest in Canada – and as the initial stage of an ultimately 2,500 MW addition, one of the most ambitious such initiatives anywhere in North America. A 2022 report commissioned by ESC indicates the province could need as much as 4 to 6 gigawatts (GW) of short-duration storage – generally defined as assets capable of discharging energy for 6 hours or less – as part of Ontario’s path to net zero.

However, as Ontario brings on more non-emitting generation, particularly intermittent resources (such as wind or solar) and peak demand reaches new levels, the province will need a more substantial inventory of LDES resources to ensure its grid continues to be reliable when the wind isn’t blowing, and the sun isn’t shining.

Energy Storage Canada’s report is the first to go beyond speculating the potential use cases for LDES technologies to research the potential scope of investment for Ontario as the province decarbonizes, with the modelling provided by Dunsky Energy & Climate Advisors, which illustrates the specific advantages investment in LDES assets can provide.

Using as a baseline the IESO’s Pathways to Decarbonization (P2D) study from December 2022, Dunsky analyzed the likeliest risks in those scenarios, quantifying the cost of falling short in our planning, procurement, construction, and import objectives compared to the alternative cost of procuring LDES assets. Evaluating by the technical readiness and value proposition of LDES as a ‘guardrail’ for Ontario’s economic growth and decarbonization journey, Dunsky found that a minimum of 6 GW of LDES capacity would be economically beneficial starting in 2032.

However, LDES technologies generally have long lead-times for development, meaning that to ensure the assets are available when we need them, we need to start planning now. As the province’s grid undergoes a massive transformation and modernization in the coming decades to meet its energy needs, integrating new assets in new ways, the importance of pursuing innovative solutions and technologies, such as long duration energy storage, will become increasingly important. While 2032 is 8 years away, the time to act is now.

To that end, Energy Storage Canada is calling on the IESO to make a formal commitment this year for initiating a procurement process in 2025, with a 6 GW target. Critical factors such as the availability of Canada’s Clean Technology Investment Tax Credits (ITCs) for projects completed prior to 2032, the extensive lead time necessary for prospective proponents to develop positive relationships with Ontario municipalities, to develop equitable and beneficial partnerships with the province’s First Nations communities, and secure supply chain commitments in a competitive global market all demonstrate the need to begin the process now.

Energy Storage Canada and our members look forward to continuing the work with the Ministry of Energy and the IESO to further develop the innovative research related to long duration energy storage, and all storage technologies. The integration of LDES has the potential to build on Ontario’s energy storage advantage, ensuring the province continues to have a reliable, sustainable, flexible, energy supply in the decades to come.