These comments and an…

These comments and an accompanying paper were also submitted to ltep@ontario.ca

 

Andrea Pastori

 

Cabinet Liaison and Strategic Policy Coordinator

 

Ministry of Energy

 

Strategic, Network and Agency Policy Division

 

Strategic Policy and Analytics Branch

 

77 Grenville Street, Floor 6th

 

Toronto Ontario  M7A 2C1

 

submitted electronically at www.ebr.gov.on.ca

 

submitted by email to ltep@ontario.ca

 

RE:EBR Registry No. 012-8840

 

Dear Ministry,

 

Varentec welcomes the opportunity to participate in the ongoing review of Ontario’s Long-Term Energy Plan (LTEP) as outlined in EBR Registry Number 012-8840.

 

Varentec is a leading provider of Grid Edge Volt-VAR control solutions for municipal utilities, cooperatives and investor-owned utilities. Varentec empowers utilities with the hardware and software needed to increase customer satisfaction, grid efficiency, manage peak demand, reduce consumer energy consumption and effectively integrate renewable energy resources. Deployed on the consumer-side of the grid, Varentec’s ENGO dynamic VAR devices autonomously sense and regulate voltages by injecting dynamically reactive power at the Grid Edge. Coupled with Varentec’s proprietary GEMS™ software platform, utilities of all sizes gain unparalleled, real-time control, monitoring and visibility into power and energy usage and grid operation across the electrical distribution system.

 

As an innovator in voltage optimization technology, Varentec can provide a valuable perspective to the LTEP process. Given our experience in early deployments in the United States and Canada, we believe that there is strong potential for voltage optimization technology to directly benefit the ratepayers of Ontario and support policy objectives established in the province.

 

To provide a sense of scale and context, Varentec has conducted a preliminary assessment that concluded that deployment of advanced voltage optimization could deliver 1.8 TWh annually of energy savings and 1.6% reduction of total Ontario net electricity demand. As outlined in the attached briefing document, with the right regulatory framework, advanced voltage optimization (“grid-edge CVR”) can deliver a strong IRR for utilities (10%-15%), an LCOE at or below conventional CDM programs, and a lower customer bill (2%-3% net bill reduction).

 

However, these potential benefits are limited by:

 

(1)definition of Conservation and Demand Management (CDM) programs, and

 

(2)lack of financial mechanisms to address the impacts of lost revenue opportunities for distributors.

 

Specifically, it is our observation that there is no current mechanism for system-wide efficiency upgrades (such as voltage optimization) to be included in CDM programs and targets. Further, even if an LDC were to invest in these new technologies, the LDC would realize lost revenues due to the lower energy sales measured as a result of lower voltage levels. The result is for Ontario electricity customers is that they do not benefit from improved electrical service that meets Ontario’s conservation goals.

 

In many jurisdictions in the United States, specific provisions have been established to include similar “grid-side” efficiency investments to qualify toward policy mandates. Similarly, many jurisdictions have established lost revenue recovery and other financial mechanisms to encourage and support utility investments in advanced technologies with proven efficiency benefits.

 

We believe that similar mechanisms can provide substantial and measurable benefits for Ontario’s electricity system and clean energy goals.

 

Recommendations

 

In consideration of the benefits available to Ontario from advanced voltage optimization, Varentec offers the following recommendations with regard to the Long-Term Energy Plan:

 

1.Voltage optimization should be incorporated into the Long-Term Energy Plan.

 

As the Minister notes in the opening message of the Discussion Guide, Planning Ontario’s Energy Future, the most pressing question is, “Are we well-positioned for the future?” In order to take full advantage of advanced technologies and distributed clean energy technologies, voltage optimization must be included in the planning and strategic objectives. Incorporating voltage technologies requires upgrades to the distribution system that can provide (1) overall system efficiencies through reduced energy consumption, and (2) integration of intermittent and distributed energy technologies. Voltage optimization offers both immediate benefits (e.g., energy efficiency) and long-term capability improvements (e.g., distributed energy integration). The need for these capabilities is further highlighted in the Discussion Guide, which notes, “Innovation and changes in customer behaviour are encouraging the spread of new energy technologies” such as energy storage, smart homes, microgrids, distributed energy resources and electric vehicles. The Discussion Manual concludes, “These changes all require a modern distribution system.” We agree and further submit that a “modern distribution system” is one that includes advanced voltage management capabilities.

 

2.Investments by LDC’s that result in energy savings should be qualified as Conservation and Demand Management (CDM) Programs.

 

Currently, it is our understanding that only investment and technologies deployed “behind customers’ meters” can be considered as CDM Programs. This limited definition excludes opportunities for substantial, measurable energy savings that can occur through system-wide upgrades. These benefits should not be ignored simply because they occur on the “grid-side” of the customers’ meters. The Long-Term Energy Plan should include and encourage energy efficiency savings through all available means, which is consistent with the “Conservation First” principles established by the province. The most immediate and obvious remedy includes changing the definition of “Conservation and Demand Management.” We recommend that the Ministry initiate the process to revise the code immediately and, to the extent allowed by their authority, establish interim guidance that qualifies these investments by LDC’s.

 

3.Mechanisms to address financial impacts of lower energy sales should be established to support investments by LDC’s.

 

As we have noted, jurisdictions in the United States and elsewhere have established mechanisms to address the financial impacts of lost revenue associated with energy efficiency programs. Such a mechanism will support the deployment of advanced voltage technologies by LDC’s within Ontario. The existing Lost Revenue Adjustment Mechanism provides a vehicle to support investments by distribution companies within the province to deploy advance voltage technologies. We recommend the Ministry initiate and support the process that would qualify investments in these technologies to be supported by the existing lost revenue adjustment mechanisms.

 

Varentec appreciates the opportunity to provide these comments on the Long-Term Energy Plan and the potential benefits available from advanced voltage management technologies. We respectfully submit that there are opportunities to take immediate action that will support accelerated deployment of these critical functions and capabilities. Ontario will benefit from immediate energy efficiency savings and enhanced capabilities to support distributed energy that are consistent with policy objectives established by the province.

 

We look forward to opportunities to further contribute to this important discussion.

 

[Original Comment ID: 207033]