We commend the government on…

Numéro du REO

019-9235

Identifiant (ID) du commentaire

110272

Commentaire fait au nom

NRStor

Statut du commentaire

Commentaire

We commend the government on proposing a longer-term framework and commitment for energy efficiency program funding. A 12-year framework provides strong positive policy certainty to the market for investing in opportunities that enable Ontario’s economic growth through more efficient use of our existing infrastructure and with prudent use of ratepayer funding.

We are pleased to see a renewed interest by the government in the residential sector, with a focus on making it easy for customers through a single-window energy efficiency programming delivery approach.

At NRStor and MPOWER, we have spent the last decade supporting hundreds of residential customers with battery assets right in their homes to power their own needs, including provision of back-up power and helping with electricity bill savings. We helped utilities test pilots that have successfully demonstrated the cost-effective value-add of residential battery assets to the grid.

In 2022, Hydro One Network Incorporated’s Residential Reliability Improvement Program delivered by MPOWER was the recipient of the Ontario Energy Association Innovation award for improving reliability for their customers through residential battery installations at 8% of the cost of a traditional wires solution.

We have now begun development work on commercial-scale deployments of residential batteries. Aggregated distributed assets, and in particular storage, can be deployed rapidly and thus offer modular and scalable solutions to meeting Ontario’s growing electricity demands more flexibly and cost effectively. This is essential today as we experience increasing grid constraints that result in rising transmission and distribution infrastructure costs, as well as resilience needs that can be exceptionally heightened in some localities.

Distributed assets and non-wires solutions empower customers to become active participants in the energy transition within their communities while also helping to improve grid productivity at a low-cost.

However, the potential of aggregated distributed assets remains largely untapped. From a developer’s point of view, the hurdle we face is lack of an established compensation recovery framework with adequate and sufficient revenue streams for the provision of multiple services at the bulk supply, transmission, and distribution levels, which can stack up against the costs of procuring, installing and operationalizing distributed assets.

While large generation assets can benefit from long term procurements that offer 20+ years of revenue contracts with the Independent Electricity System Operator (IESO), there is no equivalent revenue certainty for aggregated distributed assets.

We recommend a framework that establishes a level-playing field for distributed energy resources (DERs) and aggregations, and in particular storage, both behind-the-meter and front-of-the-meter distributed assets to unlock the full-stack of benefits, guided by the objectives of today’s electricity system, including affordability, reliability, clean energy integration and decarbonization, customer-centricity and equity, and access.

This can be done by incentivizing services provided by DERs, included aggregated DERs, through a combination of granular and temporal marginal pricing signals and rate design, structured programs, and market tools such as longer-term procurements for addressing distribution, transmission, and bulk supply system needs.

Further coordination of needs and options in planning exercises (at the system-, regional-, transmission- and distribution- levels) and procurement approaches will help ensure sufficient lead time for exploration and pursuit of DERs and non-wires solutions for the benefit of ratepayers and communities.

As an example, in regions that anticipate significant new housing development, a coordinated distribution and regional planning can prioritize deployment of distributed storage at the construction phase as part of a streamlined whole-home and single-window approach to energy efficiency program delivery, particularly for residences of First Nations, vulnerable, and/or income-eligible populations as well as in community centres and high-priority institutions like hospitals. This will help mitigate the impact of new load on the grid and cost effectively relieve upstream transmission and distribution constraints, ensure affordability, and provide back-up power for essential services. Furthermore, these distributed storage assets when aggregated can enable more dynamic use of the grid at a time of high volatility in demand and supply.

To help facilitate a more coordinated approach beyond the least cost optimization model, we recommend instituting regional champions that are representative of a set of communities who can help guide localized support and energy efficiency programming tailored to the diverse needs of their communities. These champions can be tasked with coordinating with local entities to gather input for system planners (IESO and Local Distribution Companies) as to how costs and benefits including access and reliability are distributed across populations within the community.

To address equity gaps faced by priority populations such as First Nations, income-eligible residents, and climate vulnerable and underserved groups, we recommend a dedicated energy efficiency budget that:
- Is enduring (auto-renewed);
- Feeds into a whole-community inclusive and collaborative approach in program design and delivery and capacity building; and
- Ensures early engagement with priority populations or their representative regional champions to help contemplate energy in the boarder context of their needs (e.g., in housing and water infrastructure), barriers to participation (including structural and institutional), potential (e.g., in engaging with youth and building their energy literacy and capacity), and community self-defined wish-lists (e.g., to strengthen their local economy as articulated in their community plans).

Ontario’s growing electricity needs call for flexible, cost-effective solutions. DERs offer an opportune and low-risk path to cost-effectively and more efficiently use existing resources and infrastructure while putting communities at the forefront of shaping Ontario’s energy transition.