Non-Wires Options Across Ontario Ottawa LAC Meeting #6 October 26, 2016
Objectives and Outline 1) Provide an overview of Ontario’s experience with distributed resources to date 2) Describe how distributed resources may provide value through the regional planning process 3) Inform the LAC about examples of local ‘non -wires ’ alternatives currently being implemented 4) Hear from the LAC about how non-wires alternatives may be applied in the Ottawa area 2
Review of Province-Wide Distributed Resource Initiatives • The following distributed resource initiatives have been implemented by LDCs and/or the IESO: – LDCs have developed plans to implement aggressive conservation targets as part of the province’s Conservation First Framework – Approximately 9,000 MW of non-hydro renewable generation has been contracted – The IESO has contracted about 50 MW of energy storage projects – Hydroelectric generation facilities have been refurbished and expanded (e.g. Chaudiere Falls) – The IESO secured approximately 300 MW of demand response (DR) in the first DR auction, held in late 2015 • These resources have not been ‘targeted’ to address local needs, however some will provide local benefits 3
Regional Planning Focuses on Local Reliability Needs • To date, province-wide distributed resource initiatives have been implemented with consideration of the system value, but not local value – System value is uniform across the province based on provincial demand projections and supply planning • Local value must be evaluated based on regional planning needs, focusing on customer reliability – These needs may be addressed with wires or non-wires options • Value (local or system) may take the form of: – Capacity (MW) to supply the local or provincial peak hours, short-term or long-term – Energy (MWh) to supply customers 8760 hours per year, – Ancillary services (voltage support, or operational responsiveness), – Increased resilience for customer or local area, – Lower emissions relative to alternatives • Cost allocation must align with the value obtained by local vs. provincial ratepayers 4
How Distributed Resources can Provide Value in Regional Planning Challenges 1. Without incremental energy or capacity needs at the provincial level, it is difficult for non-wires options to compete economically with wires solutions which make use of existing and committed provincial resources 2. No clear regulation on cost responsibility or regulatory approval mechanism for non-wires options to meet regional needs 3. Further understanding of costs, values and potential of non-wires options to meet local needs is required 5
How Distributed Resources can Provide Value in Regional Planning – cont. Opportunities 1. Alignment of regional plans with community and municipality plans, including impacts of the climate change action plan 2. Ontario Energy Board has launched a Regional Planning and Cost Allocation Review consultation process. The IESO is part of a Working Group which is reviewing a comprehensive issues list. Details are available on the Energy Board website. 3. The IESO is working with several LDCs on pilot projects, including PowerStream’s Power.House, and DR in Brant County, which may provide data on the feasibility and cost of non-wires options 6
EXAMPLES OF LOCAL NON-WIRES ALTERNATIVES 7
Brant Local Demand Response (DR) Pilot • Demand response is a resource which compensates customers for reducing their electricity consumption at the time of peak demand • The IESO is launching a targeted DR pilot program in the Brant area, with support from LDCs – Pilot is intended to help the IESO and LDCs test the use of DR to assist with local capacity needs – Builds on IESO’s successful province -wide DR auction held in late 2015 • Seeking to secure up to 15 MW of DR from customers supplied by Brant TS or Powerline MTS – These resources will also provide interim capacity, if required, until long-term capacity provided by transmission reinforcements are in place in 2019 • Resource must be available for summers of 2017 and 2018 8
Brant Local Demand Response (DR) Pilot – cont. • Mainly targeting non-residential customers, allowing both aggregator and direct participants • Currently procuring for June – September 2017, but anticipating another request for proposals for June 2018 – September 2018 • Procurement method will be a RFP process – Draft RFP has been posted and Draft Agreement to be posted by October 31 st and Final RFP & Agreement to be posted December 1 st , 2016 Submission window for proposals will close January 13 th , 2017 – 9
PowerStream POWER.HOUSE • A ‘virtual power plant’ project being led by PowerStream based in York Region to study the feasibility of mass adoption of residential solar-storage resources, controlled by the LDC – Studying market potential – Forecasting costs for deployment – Forecasting monetization of customer and system value based on expected performance levels – Studying economic feasibility – Addressing business model road blocks • Includes 20 homes within Markham, Richmond Hill and Vaughan • A 5 kW solar array, 6.8 kW inverter, and 11 kWh lithium-ion battery are installed behind-the-meter at each home 10
PowerStream POWER.HOUSE – cont. • Individual elements are controlled by the LDC through intelligent software to simulate a single, larger power generating facility • Customer benefits: – Reduced exposure to peak electricity rates – Ability to manage electricity costs and lower bills – Outage protection due to on-site generation and storage • Customers make the upfront contribution and will pay a monthly service fee for a five-year term • External consultant engaged to carry out an evaluation study – Supported by the IESO’s Conservation Fund, as well as the LDC 11
Targeted Conservation • The IESO is working with LDCs in three regions to support local area targeted conservation feasibility studies – Building on the IESO’s 2016 Conservation Achievable Potential study – Currently working to develop studies for Toronto, Barrie-Innisfil, and Parry Sound-Muskoka regions – Studies will determine the potential and associated costs for targeting conservation efforts to specific stations, etc., to address local area needs – LDCs will lead studies and apply to the IESO Conservation Fund for funding 12
Net Metering • Going forward, net metering will be the mechanism for increasing distributed generation across Ontario – No IESO contract required – LDCs will continue to play a key role in facilitating connections – Customer participation will depend on economics • Forecasting the impact of net metering may pose a challenge for LDCs 13
Questions for the LAC • How would these concepts fit with Ottawa customers? • Are there additional initiatives (e.g. local initiatives) that LAC members are aware of? • What benefits can be attributed to these initiatives? – e.g. reduced peak demand, reduced energy consumption – Who benefits? e.g. Customer, LDC, or system? – What is the monetary value? How does this compare to the cost? – How much are customers willing to pay for intangible benefits, such as resilience? 14
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