It has been announced that NOTL Hydro has donated its battery storage unit to Niagara College. The announcement can be found at: https://www.niagaracollege.ca/blog/2023/11/27/niagara-college-welcomes-battery-donation-from-notl-hydro-to-offset-peak-energy-usage/. This battery storage unit includes the housing, the many lithium-ion batteries, the fire protection equipment, the air conditioner and the programming and computer electronics for managing the device. It has a peak charge of 250 kW and can provide 250 kwh of power over time from each charge.
The battery unit was originally purchased as part of a Smart Grid Fund project in 2018-2021. The project, which was partly funded (20%) by the Government of Ontario Smart Grid Fund looked at the uses of a battery on a primary feeder such as allowing the installation of more distributed energy resources, voltage management and peak shaving. A more detailed description of this project and the results can be found on my blog of August 10, 2022 https://www.notlhydro.com/notl-battery-project/ .
Unfortunately, we were not able to find an economical use for the battery once the project was completed. We had hoped to continue to use it for peak shaving by charging the battery at night and using that charge at peak times and thus reducing the overall cost of electricity for our customers. However, the mechanics of the global adjustment (GA) meant that even this was not economical. There are two reasons this:
- First, most of the cost of electricity is now in the GA and not the hourly price (HOEP). In October 2023, HOEP averaged 3.14¢/kwh and was 27% of the combined HOEP and GA cost. Back in 2020, the HOEP was even lower at a little over 1¢/kwh. When prices are this low, the variation between the high prices at peak times and the low prices at night are also low. This meant that the savings to be realized by the peak shaving was also very low.
- Second, the GA is applied evenly across every hour no matter the time. The same rate is applied when charging at night and when discharging at peak times. A battery is not 100% efficient. Power is needed to keep the battery live 24 hours a day and some power is lost during the charging. We estimate this battery was 84% efficient. The 16% lost power was charged at the full GA rate no matter the time.
The lowered savings and the higher costs to run the battery contributed to it not being economical. It might have been a different story if the GA rate was also applied in a manner that recognized the cost of power at different times of the day. NOTL Hydro requested this back in early 2020. Of course, it would be even better if there was no GA and HOEP reflected the actual cost of generating electricity but that is a different story.
While NOTL Hydro’s situation was unusual with a standalone battery, one wonders how many other situations there are across the province where a business has not made changes to their energy usage because the savings from peak shaving are so artificially low. I believe this is a significant lost opportunity.
As NOTL Hydro could not use the battery economically, we looked to sell it. However, the market in Ontario for batteries such as this is small. At 250 kW it is too big for any residential applications. It is also much smaller than most commercial applications which tend to be at least 1 MW. Despite interest from a number of parties we were unable to find a buyer.
NOTL Hydro is thus very happy that Niagara College is able use the battery for its own sustainability efforts and for potential use by its students. As the College has one of its campuses in Niagara-on-the-Lake, there is also the possibility of a mutual project in the future using the battery.