1. Joint OSPE – PEO Chapter Energy Policy Presentation Prepared by OSPE’s Energy Task Force 1

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3.  The Ontario generation (except for solar) and customer demand data was obtained from the IESO website (http://www.ieso.ca).  Solar flux data comes from the Canadian Weather for Energy Calculations (CWEC) dataset for Toronto, Environment Canada. Solar generation output simulations were produced courtesy of CarbonFree Technology using PVsyst simulation software.  Electricity production cost data was obtained from Ontario FIT rates and the Projected Costs of Generating Electricity, 2010 Edition, Organization for Economic Co-operation and Development, median case with carbon tax removed.  You can download OSPE energy policy documents and this slide presentation at: http://www.ospe.on.ca/?page=adv_issue_energy 3

4.  Customer load varies significantly over time (very low in the spring at night and very high in the summer during the day). The summer peak is almost 250% higher than the spring low.  Some generation technologies cannot adjust output to match demand (limited ramp rates, minimum loads, etc.).  Some generation technologies (wind and solar) are intermittent and can change output very quickly opposite to demand and can disappear for extended periods of time across the province.  Storage is an integrating technology – enables supply to better match demand.  Ontario has some hydroelectric storage but not enough to handle 10,000 MW of planned intermittent renewable generation. 4

5. 5 2011 Average annual grid capacity factor was 63% 2011 Minimum demand was 42% of peak demand

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8. 8  Storage provides renewables with a zero GHG emission backup.  Storage can support voltage regulation and grid frequency regulation.  Storage reduces the amount of dispatching (load following) imposed on generators (improves plant capacity factors)  Storage reduces the natural gas plant capacity needed to meet peak demand and reserves.  Storage enables better utilization of base-load nuclear plants.  Storage can reduce the required capacity of transmission and distribution lines if it is located optimally.

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10.  Traditional Storage options:  Short term storage:  Batteries,  Flywheels,  Compressed air (tanks & underwater volumes).  Dam and pumped hydroelectric (with small reservoirs – eg Niagara Pumped Generating Station).  Longer term storage:  Compressed air in underground caverns,  Dam and pumped hydroelectric (with very large reservoirs – eg: Quebec’s James Bay development). 10

11.  Non-traditional Storage options:  Electricity  Stored Hydrogen  Combustion  Electricity  engine or fuel cell combustion  low round trip efficiency  better suited to off-grid applications that displace diesel  Electricity  Hydrogen  Injected into Gas Network  Electricity  known as power-to-gas or P2G  low round trip efficiency  limits to the amount of hydrogen in natural gas lines  ample seasonal storage capability 11

12.  Large electrical demand variation increases the required peak power rating of storage in kW and the integrated capacity rating in kWh.  Seasonal storage (shifting production from spring to summer and autumn to winter) is the most valuable but it is also the most expensive and environmentally disruptive.  All storage options lose some of the stored energy over time (5 to 50% depending on technology and storage duration).  Hydroelectric storage Is the cheapest large scale storage but you need ideal geography – not available in Ontario. A 5,000 MW storage capability to handle 7,500 MW of wind requires 750 sq km upper reservoir (about the size of Lake Simcoe), 15 m deep and 100 m above the lower reservoir or lake. 12

13.  Cost is prohibitive – see 2010 EPRI Report 1020675  Batteries: 1 to 5 k$/kW & 0.2 to 5.0 k$/kWh (short life, 3 to 12 yrs)  Flywheels: 2 k$/kW & 2 to 9 k$/kWh (10 hrs max storage)  Compressed Gas: 1 to 2 k$/kW & 0.1 to 0.5 k$/kWh (low efficency)  Pumped Hydroelectric: 1 to 9 k$/kW & 0.2 to 0.9 k$/kWh (uses large land areas)  Power-to-Gas: commercial costs not yet available  Batteries to provide voltage regulation for short storage periods (less than 1 hour) on the distribution system is now cost effective. 13

14. 14  Improved demand management & load shifting  Improved load following at existing plants  Surplus steam to district industrial process steam system  Produce hydrogen during off-peak hours  Export energy at below the cost of production. No energy is wasted with these options.  Hydroelectric spill  Dispatch Solar and wind generation down  Improve nuclear steam bypass capability Energy is wasted with these options.

15. 15  Storage is an elegant solution.  Much too expensive now to deploy on a large scale.  Other non-storage options are available to manage supply-demand balance until storage costs drop.

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