ThinkEnergy Is Energy Storage the Missing Link to a Clean-Energy Future?
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Transcript:
Dan Seguin 00:06
This is thinkenergy, the podcast that helps you better understand the fast changing world of energy through conversations with game changers, industry leaders, and influencers. So join me, Dan Seguin, and my co host, Rebecca Schwartz, as we explore both traditional and unconventional facets of the energy industry. Hey, everyone, welcome back. Today we're going to talk all things energy storage in Canada. We're welcoming back a guest we had on the show in 2020. To see what are some of the recent developments and insights in the energy storage industry that have occurred since our last discussion.
Rebecca Schwartz 00:51
Well, when I think of energy storage, I immediately think of batteries, you know, like Duracell, the Energizer Bunny, or even the battery pack in our cell phones- and mine that dies way too often. Honestly, it's pretty cool how we can just carry around these little capsules of energy anywhere we need or want.
Dan Seguin 01:09
It's actually a good comparison. But instead of charging your smartphone or powering your flashlight, energy storage is being leveraged on a whole other scale that could hold the key to many of our environmental and energy goals. According to urban insight, energy storage has been identified as the key to climate change mitigation. But globally, only 3 to 4% of electricity generated by utilities is being stored. They estimate that to limit global warming to below two celsius, energy storage capacity needs to triple overall by 2050.
Rebecca Schwartz 01:55
Recently, an article was published by Energy Storage Canada about our country's evolving electricity grid, and how energy storage and distributed energy resources are putting increasing expectations on our electricity grid to be more adaptable.
Dan Seguin 02:11
Power grids, by their very nature are designed for the fluctuation in electricy demand throughout the day by increasing and decreasing supply when necessary. Energy storage could offset peak electricity consumption periods like in the afternoon, and in early evening when people are returning from work or school. Not to mention our hot and humid summer days when everyone is running their air conditioning units.
Rebecca Schwartz 02:42
Storing energy and integrating it when it's needed into the system would prevent more expensive and potentially emission heavy infrastructure from being built.
Dan Seguin 02:52
So here's today's big question- what are ways countries like Canada can speed up its storage capacity to suit its demand? And are we on track to make it happen in time?
Rebecca Schwartz 03:09
Energy Storage Canada is the national voice for the energy storage industry. They are the only association that's dedicated to advancing energy storage in the country. Justin Rangooni, the Executive Director at Energy Storage Canada is here to talk about how Canada is and isn't charging up the energy storage revolution.
Dan Seguin 03:30
Nice to have you back, Justin. Let's dive in because I'm anxious to chat with you about what has changed within the energy storage industry here in Canada since we last spoke in back in November 2020. So let's kick this off with this question. What's been the most significant change in your industry since we last spoke in 2020?
Justin Rangooni 03:55
Thanks for the question. Great to be back in two years felt like not even that long ago. So it's really good. Good. Good. Good to chat again. So a lot has happened since we last chatted. So I think when we last spoke, it was all about talking about how at Energy Storage Canada we are trying to talk with decision makers in Ontario and the rest of Canada, about the benefits energy storage provide the system. Reliability, affordability, what have you and all the various services that energy storage can provide. So it's a matter of, of really educating decision makers. So flash fast forward, fast forward two years to today. It's more now, what's really changed is that the decision makers have now recognized that and now as they're doing their system planning and will focus in on Ontario specifically, is as they're talking about system planning and what is going to meet capacity needs and what's going to be used for any decarbonisation efforts. Energy storage is part of that conversation. It's part of that calculus. And this is exactly what we wanted to see and that's what- that's what's really changed. It's now part of that calculus in terms of what's going to happen next.
Rebecca Schwartz 05:03
How important is energy storage and supporting wide scale deployment of renewable energy resources so that Canada can meet its net-zero goals?
Justin Rangooni 05:11
I think the best response would be I found a new analogy. And it was from the New Yorker in a recent article that talked about the old energy storage provider in terms of optimizing the grids, the assets that are already on the grid. So what they talked about is when in situations when the wind is blowing, the sun is shining, the hydro, the water is flowing, the nuclear plants are humming, energy storage allows electricity grid to inhale. And then when the sun's not blowing, or the winds, that winds not blowing, or the sun's not shining, or the water is not flowing, or the nuclear plants aren't humming, what energy storage allows the grid is to exhale, and deliver that electricity to homes and businesses and to charge devices. And so that's what energy storage can do is to optimize.
Rebecca Schwartz 05:56
All right now, is there concern though, that energy storage will affect the grid? Like cause instability or create potential imbalances of supply? And is this maybe where energy storage and renewable energy intersect?
Justin Rangooni 06:09
Well, I think what energy storage does is solved some of those problems. What it does is, if it's part of the solution, the overall solution in terms of balancing the grid and optimizing what you have, energy storage can do that. Because one of the benefits of energy storage is that it's portable. It can be it can be situated anywhere in the province or in the country, and of every size and of all the various technologies available, there's lots to choose from. And as system planners can use that as a Swiss Army knife to make, make it work where it has to so we can balance the grid and optimize the assets and provide reliability. So energy storage is is that solution provider for the energy system.
Dan Seguin 06:47
Okay. In your opinion, Justin, what's impeding the wider adoption of energy storage across Canada's provinces and territories?
Justin Rangooni 06:57
So I think one of them, would it be just an- I think we talked about this two, almost two years ago. It's just a matter of for some systems, operators and governments in certain jurisdictions now, in terms of changing their mindset into away from traditional generation, traditional poles and wires, to see what energy storage and other DER types or non wire solutions can provide to the system. Credit to Ontario and Alberta. And we're seeing this a bit in Nova Scotia. And obviously, in Quebec, they're understanding the role now that energy storage and other non wires alternatives can provide. So they're developing roadmaps, they're reducing regulatory barriers, and they're creating the market mechanisms to really enable energy storage, I think other provinces across the country who are a little bit behind will start to follow suit, as well.
Dan Seguin 07:47
Okay, another question here. I think it's safe to say that the economics of storage is improving, and in some cases, has reached cost parity with conventional technology alternatives. Are the high upfront costs a factor that's discouraging more investors? Or is there something else?
Justin Rangooni 08:08
I wouldn't say it's- I think what's discouraging investors necessarily with would just be the certainty of where that, where the market mechanisms are going to be for energy storage. So in the US, you have, I think, almost a dozen states, who have a energy storage procurement or energy storage targets. So that's sending a signal to the to the sector and investors that we're looking for energy storage, we're looking for non wire alternatives to put on the grid. So what that's I think that's the biggest thing that others are looking for in Canada is, where's that certainty? Where's that? Where's the path forward for energy storage in the country? So I think in Ontario, we're starting to see that with their capacity needs that are coming up, people are looking at it and saying, okay, energy storage can definitely fill that role. So they're seeing the interest in that. So you're seeing a lot more interest in Ontario for the role of energy storage.
Rebecca Schwartz 09:03
All right, Justin, if you had to break it down super quick for someone, what would be your elevator pitch for why we should integrate energy storage into a broader system framework? So if you had one minute to convince them that energy storage is the missing link to accelerating our path, to net-zero, what would you say?
Justin Rangooni 09:20
So I won't do the analogy again. But if it was the first time of the elevator, that first I would use the inhaling/exhaling analogy. But what I would say quickly is simply that energy storage is a solution provider. It provides different solutions depending on what the need is. If you need it for reliability reasons to make sure that the lights are going to be on energy storage can play that role by saving that energy when it's needed. Storing the energy when it's when it's when it's needed, and then issuing it and then also for affordability reasons to defer investments and new generation or new poles and wires. There's a lot of different reasons for energy storage, but again, I think that analogy is the best one I've seen so far.
Dan Seguin 10:04
Some might not like me for this next one. But here goes Justin, how can energy storage help meet demand spikes, and also reduce or even eliminate the need to maintain or build new gas plants, which are among the dirtiest generators on the grid here in Ontario.
Justin Rangooni 10:27
So where energy storage can play that critical role is storing electricity when it's generated at times when maybe you don't need it. So instead of curtailing or spilling water, or unnecessary or maybe importing it, or exporting it at a loss for that excess surplus generation, energy storage can step store that electricity. So when there's peaks in demand, and energy storage can, you know use that the system planners can use the electricity that is stored during those peak demands, and to really start leveling out that need for the new peaker plants or existing peaker plants for that matter. So it's really storing the energy for a future use. And that's, that's why we're so excited about energy storage.
Dan Seguin 11:12
Now, in an article you wrote in 2021, you reference that the Independent Electricity System Operator was undertaking a study on the potential phase out of Canada's gas generation. You noted that energy storage Canada was keen to participate in the study. Has there been any movement? What are you hoping to achieve?
Justin Rangooni 11:39
So what happens is we last talked is the IESO did kind of, I would call it a preliminary report, on their decarbonisation efforts or the phase out of natural gas. And a lot of stakeholders took issue with it because of the some of the assumptions that were made. And even the Minister of Energy, looked at it and said, you know what, go back and develop the path. So we are eager to see what that path will be now coming out in November, I think the report is due from the IESO. And what we would like to see is a various, a long range of assumptions and scenarios that really get us to that proper path that is cost effective and reliable. The first path kind of just used one scenario. But I think there are very much very different paths to achiev net-Zero in Ontario and in Canada, and what energy storage can provide because there's different technologies because it could be short duration, or long duration, could be pumped storage or flywheels, or batteries, or what have you. And it can be in different locations, throughout the province or throughout the country. There are many different pathways to get there. So that's what we would really like to see in that report. Show us all the different scenarios; show us the cost effectiveness so you have a wide menu, a variety of a menu to choose from. And we think it can be done. In fact, energy storage, Canada will be issuing a report, working on a report right now, that will be done later this year, with regards to how much energy storage will be required in Canada to achieve net-zero by 2035, that the federal government targeted. Because we're hearing a lot of other numbers of saying how we're gonna get there. So we're trying to say as well how much energy storage is going to be required to make that happened. So we look forward to sharing that report with you in the next few months.
Rebecca Schwartz 13:22
All right, Justin, are you seeing policy or regulatory movement at the municipal, provincial or federal level, to help facilitate energy storage into future plans? And could you talk a bit to what's encouraging you and maybe touch a little on what's discouraging you?
Justin Rangooni 13:38
So I would say encouraging is the example set out in Ontario and Alberta. They they took a concerted effort credit to the Alberta System Operating and credit to the Ontario's IESO for developing a roadmap to say, okay, we know energy storage is coming. So what do we have to do to get our house in order with market rules with regulatory rules with system tool upgrades? So they've really set out a nice path? Obviously, maybe discouraging, we would say and Ontario is okay, you're not, maybe you can get a little faster in terms of really that opportunity of value stacking all the all the values that energy storage can provide, we probably want to see that timeline accelerated a little bit, but at least it's out there. We and we hope that this could serve as a good signpost for other provinces to follow. And we're seeing that hopefully in Nova Scotia, and hopefully maybe we'll see that in Saskatchewan and New Brunswick, what have you trying to say? What is that roadmap to really enabling energy storage because we know it's coming.
Dan Seguin 13:38
Now, let's tackle a catchy subject. Cost. How does energy storage protect provinces, cities, utilities and customers against rising demand and energy costs?
Justin Rangooni 14:50
So I would probably hark back to our report that we did in the summer of 2020 by Power Advisory for Ontario. We looked at and said well, how if there were at least 1000 megawatts of energy storage on the grid, what would be the impact for ratepayers. And what the power advisory report concluded was with with at least 1000 megawatts of energy storage on the grid, it would save ratepayers approximately $2 billion over the over the next decade. And what they looked at was ways that it was saving ratepayers money. It was deferring invest poles, a traditional poles and wires investments, maybe they don't have to be made right now you can defer some of those. Avoidance or deferral of new power generation, which is costly. So it's, it's those mainly two and again, it's also price, perhaps arbitrage, too where we're seeing, with some larger commercial industrial customers, who have behind the meter storage installed, and are avoiding the high demand times by using the energy storage and it's stored behind the meter to save, save on cost as well. So that's where we're looking at the really the what, what energy storage can provide in terms of affordability issues. And as you mentioned before, the costs of energy storage are going down. And we're talking about batteries, we're seeing a continued decline, and forecasts are showing a decline continuing for the rest of the decade. But again, as with other technologies of energy storage technology, it's all a matter of when do you want to- where do you want to use it and what benefit it's providing?
Dan Seguin 16:19
Justin, is it fair to say that most renewable energy, like wind and solar, may require daily energy storage to maximize their benefits and secure against seasonal shortfalls in Canada, when the wind doesn't blow as much like in the summer, and the sun doesn't shine as much like in the winter?
Justin Rangooni 16:41
So yes, I think energy storage could definitely optimize that variable, renewable generation. And depending on what the technology you're looking at, it could even be done, you know, hourly too if you have a certain batteries are co-located, or are very close to those the wind and solar assets as well. And again, energy storage also provides that benefit to all forms of generation, it's a matter of storing what's on the grid and the system operators using the tool that energy storage provides to say, well, we don't need all this power that all our generation assets are producing. So we're going to utilize this battery, these energy storage resources, we have to store that excess energy, and then to release it when it's required. So again, if why we're so excited energy storage, because we're just talking about batteries, there's batteries, there's pump storage, there's flywheels, or compressed air, there's thermal storage, there's a lot of possibilities. And they all can play a critical role in optimizing wind and solar assets, and hydro and nuclear assets as well.
Dan Seguin 17:42
Now I have a follow up question for you, Justin. What's your prediction based on the current trajectory on how much of all energy use in Canada's 2050 future could be stored at any given time? And why is that important?
Justin Rangooni 18:00
So it's probably hard to forecast that number. Now, our report will put a number on what is the minimum to achieve net-zero by 2035. So we will have a number, a national number and broken down by the provinces as well, to see what that number is. But really, it all depends on what the system planner is using the energy storage for. Now, you could have big giant, big energy storage projects, that could be in the almost 1000 megawatts, all the way down to smaller energy storage projects with or in the single digit megawatts or less. So it really depends on what the system planner wants to utilize those energy storage projects for. So it's really tough to tell, I think an example would be right now in California, they have about 3000 megawatts of grid scale connected storage, their peak demand is almost 30,000. So 10% in California, right now, is energy storage, meeting that peak demand. And that's only growing. So again, I think it all depends on what the system planner is looking and the jurisdiction and a lot of factors. But as we're seeing in California, energy storage is playing an increasing critical role to meeting energy needs.
Rebecca Schwartz 19:07
Okay, so we've talked a lot about the many applications for energy storage beyond just cost reduction. And I'll go ahead to name a few just now. So we've talked about battery storage, increasing capacity, improving reliability, supporting renewable integration and deferring transmission upgrades. So because of its versatility, and its ability, battery storage, some might say it could be the true Swiss Army knife of grid solutions. What would you tell our audience is the best feature of battery storage? Or maybe what's most impressive secret feature that others aren't aware of?
Justin Rangooni 19:44
That's a great question. So I'm gonna do my little public service announcement. And I do this for a lot of decision makers to and others. Well, we alked about energy storage, we should talk about more than just batteries. I know it's easy just to say battery storage and a lot. A lot of a lot of people do that and it's understandable. But again, there's a lot A lot of different energy storage technologies, Energy Storage Canada, we're technology agnostic. So we represent batteries and all the different chemistries of battery, not just lithium there's zinc and there's other chemistries. We also talk about pumped storage and flywheels, thermal storage, mechanical storage, what name you there's, there's a lot of different energy storage technologies coming. So maybe that's part of the secret is that there's so when we talk about energy storage, is that there's so many different technologies there that can be used of different sizes, of different characteristics. And one thing I would say a bit of a secret, probably, that is a secret, but just something we should all remember is the portability of energy storage, this can be put anywhere, depending on the technology, it doesn't have to necessarily be in a certain part of the province or the country that has a good natural resource. It can be put anywhere that the system planner needs it. So as we're talking about even utilities, on the utility distribution side, they'll look at their distribution network and say well, where can energy storage work here? And then obviously, the IESO is looking at it from the grander scheme, the prvoincial scale, and saying well, where does it make sense? And so that's the, that's probably the best kept secret of energy storage, and it can be put anywhere.
Dan Seguin 21:10
Having gone through two years of pandemic, what has been the impact of this pandemic, on the energy storage industry? Have there been opportunities that perhaps you weren't aware of before?
Justin Rangooni 21:26
That's an interesting topic. I think, what, obviously, the pandemic has been tough on all sectors with supply chain issues, so that that energy storage is no different from what we're seeing in other jurisdictions as well. But what I think it has allowed system operators and governments to do is to think of other ways how to decarbonize how to provide reliability service, how to make the system more affordable, and has allowed them to start thinking a bit about more innovative solutions, like energy storage, and other non wires alternatives. So the pandemic has allowed that opportunity for more positive thinking, and we're starting to see that in other in Ontario, and and throughout Canada.
Rebecca Schwartz 22:06
All right, we would love to hear your thoughts on vehicle to grid and vehicle to building systems. And if you think that they'll become mainstream when regulatory barriers are lifted.
Justin Rangooni 22:14
So with that one, I think we've worked with some great partners like Plug'n Drive, and others, and there's a few of our members like Peak Power, who are very interested in the vehicle to grid initiative. And where we see a lot of potential obviously, is, with the increased electrification, they hope we'll have a lot more EVs on the road, is we look at that and say, well, your electric vehicle could be your battery for your home, it could be a battery for the local distribution company, if they wanted to utilize it. So in terms of your question of vehicle to grid and what it can do, I think sky's the limit in terms of the innovation, that this could be a real game changer in terms of providing needed electricity when it's required or properly optimizing it. So it's great that people are- utilities and and others are looking at electric vehicles more than just for transportation. It can also power your home, it could help power the distribution network. It's really exciting possibilities.
Dan Seguin 23:15
Okay, here's a bonus round question for customers. What's something you want the average electricity customer or homeowner to know about energy storage? Is there a place for them at the table for them to adopt this tech and help reduce climate change or their own emissions now? What are your recommendations?
Justin Rangooni 23:40
Great follow up to the last question. I think in the next- the short term answer to that one is to look to electric vehicles. That is your best way as the average homeowner in terms of your own decarbonisation efforts, really, is to get that electric vehicle. And again, with vehicle to grid, there could be a lot of possibilities that can even be more decarbonizing to the grid as well. So I would say to the average homeowner, the car battery electric vehicle can be a storage device for you to be a storage device for your utility, a lot of possibilities. So that I would say and then maybe further on in a few more years time, I think you could start seeing some residential energy storage of devices in the home as well. Again, playing with the the electric vehicle, you have in the car, maybe you have some solar panels on your roof, or again, the utility is seeing that the residential energy storage is a great tool for the utility to use. Again, there's a lot of possibilities down the road for the average homeowner but I'd say you know, electric vehicles are here. There's a lot more I would say go pop, go look at Plug'n Drive's website, go look at your local utility, talk to them, and go to your car dealership and see what electric vehicles are out there.
Rebecca Schwartz 24:53
All right, Justin, as you know, we always end our interviews with some rapid fire questions, and we've got some new ones for you. Are you ready?
Justin Rangooni 25:01
Okay, let's go.
Rebecca Schwartz 25:02
What are you reading right now?
Justin Rangooni 25:04
Oh, okay, so I am reading the fiery trial about Abraham Lincoln's evolution of his thinking on slavery, pre Civil War and during Civil War, and obviously afterwards a bit.
Rebecca Schwartz 25:18
If you had to name a boat, if you had one, what would you name it?
Justin Rangooni 25:21
That's a hard one. The only thing that comes to my mind is Boaty McBoatface. That's all like that's, that's it.
Rebecca Schwartz 25:27
Who is someone that you admire?
Justin Rangooni 25:30
So I should say my parents by now I'm talking to Hydro Ottawa. So my answer will be Bryce Conrad.
Rebecca Schwartz 25:35
What's the closest thing to real magic that you've witnessed?
Justin Rangooni 25:38
Oh, I would say the Toronto Raptors winning the NBA championship. I didn't, I didn't think that would have happened in my lifetime. So it was really magical to see and hopefully we can see it again.
Rebecca Schwartz 25:48
What's been the biggest challenge to you personally, since the pandemic began?
Justin Rangooni 25:52
Oh, thebandwidth with the kids were when they were home, with the spouse being home and working. Yeah, it was the bandwidth it was that was that was a challenge.
Rebecca Schwartz 26:02
Okay, we've all been watching a lot more Netflix and TV lately. What's your favorite show or movie right now?
Justin Rangooni 26:07
Oh, I think we watched Superstore and The Fffice on Netflix on perpetual, perpetual loop. It's a nice comfort watch.
Dan Seguin 26:15
Lastly, what's exciting you about your industry right now?
Justin Rangooni 26:21
Well, that's a great, great question to wrap it up on because I think it's this is an exciting sector to be in. I think we're catching the wave right now on some really big possibilities and opportunities for the sector. Because we're energy storage we can provide that value on the utility scale. And through to the distribution side and behind the meter to the residential. I think energy storage is really starting to take off and really becoming seen as a mainstream resource and a tool in our- in Canada's electricity system. So that's what's really exciting and really excited to see what the rest of the decade is going to bring for energy storage.
Dan Seguin 26:57
Well, Justin, this is it. We've reached the end of another episode of the thinkenergy podcast. If your listeners want to learn more about you and your organization, how can they connect?
Justin Rangooni 27:10
They can go on to energystoragecanada.org. We have a refreshed website, they can take a look and and find out some more information see all the work that we're doing see a page of our growing membership list, which includes Hydro Ottawa. Also they can attend our conference in October, it will be in person fingers crossed. Downtown Toronto is what we call it the only national conference focused on energy storage. So it's something if you're interested in storage. You don't want to miss it.
Dan Seguin 27:41
Again, Justin, thank you so much for joining us today. I hope you had lots of fun.
Justin Rangooni 27:46
I always do. This is fantastic. Thank you so much for having me back. Thank you, Daniel.
Dan Seguin 27:50
Thanks for tuning in to another episode of the thinkenergy podcast. And don't forget to subscribe and leave us a review wherever you're listening. And to find out more about today's guests or previous episodes, visit thinkenergypodcast.com. I hope you'll join us again next time as we spark even more conversations about the energy of tomorrow.