The electric grid is undergoing transformation that is both massive and historic. New technology and new business models are changing almost every part of the energy system. Responding to simultaneous demands to serve more customer needs, to control costs, and to reduce environmental impacts, grid managers and the power industry face huge pressures to define their investment plans and get shovels in the ground at speeds rarely seen before.
Many experts, including the Government of Canada, the Ontario government, and provincial energy regulators, are preparing for unprecedented levels of investment in the near and medium term. With hundreds of billions of dollars at stake, it’s hard to overstate the importance of getting these investments right.
Although the specific timelines for all this investment are uncertain, there is little doubt as to the general direction and speed of the changes underway: Cleaner and faster.
Key developments in clean energy include:
- Solar and wind energy have become so economically attractive in parts of Canada that private investors are building grid-scale renewable power projects that compete dollar-for-dollar without subsidies against fossil-fired power. (Market based power projects of any type have been pretty unusual in Canada until now.)
- Battery energy storage systems, key to clean energy grids, have fallen in cost by 85 per cent over the past 10 years, and continue to decline.
- Utility-scale solar power additions in the US in 2023 and 2024 are projected to double the 2022 cumulative installed capacity in just two years, while installed costs continue to decline in spite of inflation in the wider economy.
- Sizable federal incentives have been set up with 10 and 20-year time frames in both Canada and the United States, creating massive stimulus for investment in clean energy technology. These incentives have only begun to kick in.
- The International Energy Agency reports that the all-in costs of Net Zero energy will be less expensive for consumers than continuing to burn fossil fuels. Although Net Zero energy infrastructure often has higher up front capital costs compared to conventional energy systems, the Agency finds that these higher capital costs are more than offset over time because clean energy typically has little or no fuel cost, along with a host of other benefits. The Canadian Climate Institute found similar results in Canada.
Canada, along with many parts of the world, is already well down the path towards clean energy. At times it seems that the only question is how fast the transition will be.
Reliable power supply is a key challenge
New power supply will not be much good unless it’s reliable. Although consumers don’t see a line item marked “reliability” on their energy bills, you can be sure that the industry and its regulators are laser focused on it, and devoting significant resources to ensuring continued reliability. The good news here is that innovation appears to be progressing rapidly in the field of reliability, just as it is in the rest of the energy sector.
The technical options for extracting reliability from clean energy resources are growing and changing. This is both an opportunity and a challenge.
Devising and deploying clean energy reliability solutions is an important opportunity because the door is wide open for inventors, developers and entrepreneurs to bring new technology to market that will help to balance the grid, and to integrate clean energy resources seamlessly with the usage patterns of current consumers. The forms of innovation that have been tried so far have barely scratched the surface. The vitality of this field is apparent from the variety of energy-based start-ups and continuing increases in the levels of energy efficiency being deployed.
For example, Opus One, an energy software company founded in Toronto and acquired by GE Vernova, is helping utilities around the globe “create smarter and more integrated electricity distribution systems.” Joshua Wong, the original founder of Opus One and now General Manager, Grid Orchestration for GE Vernova’s Digital business, says “our goal is to modernize the grid for two-way energy flows, big data analytics, and transactive business models.” GE Vernova’s GridOS DERMS is an example of a new breed of solutions designed to enhance the range of services, including reliability services, supplied by Net Zero resources.
For many who are familiar with the electric power grid, the longstanding concern has been that wind and solar energy are intermittent resources, not always available when the grid needs them. The builders and operators of the grid understandably based their engineering on using fossil-fired generation and one-way power flows to achieve reliability, because that’s what was available and practical for many years. But there is no need to stick exclusively to these assumptions in the future.
Reliability is a function of grid design and operation that can be achieved in many ways, almost always an intricate combination of planning, operation, and continual redevelopment.
Even when a power system is working well, the most appealing reliability solutions for any given grid operator will change over time as new resources become available to the grid, as system conditions change, as customers become more engaged, and as new tools and techniques become available to grid operators. An expanding universe of technical options for achieving grid reliability lies ahead.
In Denmark, for example, when wind energy started to become a major contributor to supply more than 10 years ago, the Danish system operator, Energinet.dk, deployed a new managerial technique for reliability. They allocated certain volumes of “upward and downward regulation” to compensate for the variability of the wind energy on their system. They had to pay other generators for these regulation services but the costs were judged to be acceptable considering the relatively low cost of the wind power and other benefits. This technique enabled higher percentages of wind energy to be added to the Danish system without reducing overall reliability. New technology was introduced to cut emissions, along with technical changes to support reliability. Since that time, much higher levels of wind have been added, along with further innovations to support reliability.
While the use of fossil fuels may be scaled back in future, they will likely continue to play a role in many grids for some time. In many cases carbon-emitting energy sources can be deployed more strategically than they are now, to balance sudden swings in demand, where other resources and techniques are not yet in place. In such situations, carbon offsets can often be used to compensate for the greenhouse gases emitted when fossil fuels are burned.
Canada’s Clean Electricity Regulations anticipate a measured phase-out, essentially ensuring that most new-built generating capacity is Net Zero while allowing existing fossil fired power plants to be gradually retired as they near the end of their natural lives in most cases. A lot of options are on the table.
Ontario’s net zero reliability initiative
In Ontario, stakeholders have started working together under the umbrella of the Net Zero Reliability Initiative, to explore the options for securing reliability under changing grid conditions.
The initiative is led by Pollution Probe, an environmental organization with a long history of hosting collaborative public consultations, often in the energy sector. Richard Carlson, the director of Pollution Probe’s energy program, says: “Our priority is finding solutions to environmental problems, and that’s best achieved if you start with a deep commitment to collaboration across sectors, to identify options that have wide support.”
The Net Zero Reliability Initiative is being supported by Power Advisory LLC, a consulting firm with extensive expertise in the Ontario power system. The Net Zero Reliability Initiative recently received initial funding from The Atmospheric Fund, a non-profit foundation based in Toronto. For further information on this initiative, click here. (Full disclosure: the author of this article is a co-leader of the Net Zero Reliability Initiative.)
There is no doubt that the grid needs to adapt, likely more quickly than it ever has in the past. Making sure that it’s getting the best value out of its clean energy resources in terms of reliability is only prudent. Fortunately, the range of viable options for safeguarding reliability is expanding. One of the most critical opportunities for keeping energy prices within reason is to make sure planners, developers and operators are fully engaged with other players in the sector, to ensure they are up to speed with the latest options for extracting reliability from the clean energy resources that are the bedrock of our future energy system.
Jake Brooks is an energy consultant who served as executive director of the Association of Power Producers of Ontario for many years.
Disclaimer: This article is for general and public information only. It is not necessarily applicable to the reader’s specific circumstances and should not be relied on as the basis for financial or other decisions, unless it’s under the advice of an appropriate certified professional.
Featured image: The electricity industry is finding new ways of extracting reliability from clean energy resources. (Credit: iStock.)
