Ontario’s Independent Electricity System Operator announced March 12 the issuing of a request for proposals to procure up to 35 megawatts of energy storage to explore how new technologies can provide needed flexibility in grid operations.
The competitive process is designed to select and test a diverse portfolio of storage technologies. Once the projects are in place the IESO will assess their capabilities in helping to balance supply and demand. This process will allow the IESO to learn more about integrating new technologies into mainstream grid and market operations.
Subsequent to the IESO’s procurement, the Ontario Power Authority will issue a request for proposals for the remaining megawatts.
“Procuring energy storage services is another demonstration of how Ontario is at the forefront of emerging energy developments,” said Bruce Campbell, President and CEO of the IESO. “These procurements are structured to maximize learning about energy storage services and how they can best serve Ontario’s needs.”
It is expected that contracts will be executed by the end of June 2014.
For those wishing to respond, the RFP is available through MERX e-tendering website.
A backgrounder is available at http://www.ieso.ca/Documents/Pages/Ontario%27s-Power-System/Backgrounder-Energy-Storage-RFP.pdf for more information.
Glenn Zacher of the law firm Stikeman Elliott published an article in March with the following observations: “This procurement, which signals Ontario’s intent to become a leader in the growing energy storage space – the sector reportedly attracted over $1 billion in investment in the last two years and is projected to grow to $30 billion over the next decade – is notable in several respects. First, the IESO designed the procurement to facilitate participation by a diverse portfolio of storage technologies. The IESO has stated that a principal objective of the procurement is to test and learn about various services that storage can provide, the value of these investments in operations and how they can best be integrated into Ontario’s electricity market. The IESO is procuring storage to provide ancillary services, but the procurement has been designed to allow storage technologies to demonstrate other attributes, including: shifting energy from low demand periods to high demand periods; adding MW capacity to the system; aiding in electricity ramp (up or down); aiding in utilizing surplus baseload generation more effectively; aiding and managing transmission constraints; providing contingency response and energy reserves; and, smoothing/firming out the output of intermittent generation resources. As such, while the IESO has provided some examples of potential storage technologies – i.e., pumped hydro, compressed air energy storage, stationary batteries, flywheels and thermo energy – the procurement does not limit the types of storage technologies that may participate.
Another notable feature of the procurement process is that it is being designed so that procured storage resources can be subsequently integrated into the IESO market. The IESO has cautioned that contract structure should not distort the effective integration of storage resources into the market. Therefore, contract terms will be relatively short and contracts will be designed so that contract revenues can be replaced with market revenues. Finally, the procurement timeline is relatively short. The deadline for submitting proposals is April 28, 2014 and the IESO anticipates selecting providers by June 1, with contracts to be concluded by June 30, 2014. A more detailed RFP timeline can be accessed on the IESO’s website.”
For more information on recent energy storage developments in Ontario, see the special feature, beginning with "Power storage poised to take a leap forward".