A snapshot of Canada’s energy storage market in 2023
By Justin Rangooni
May 30, 2023
(view the original article in Energy Storage News)
The last 12 months have seen considerable development in Canada’s energy storage market. The result is a sense of powerful momentum building within the sector to accelerate the development and deployment of energy storage, particularly within the context of enabling Canada’s net-zero goals.
Examining the milestones realised, it’s not difficult to see why.
Tax credit scheme on the way
Most recently, the 2023 Federal Budget built upon the 30% Clean Technology Investment Tax Credit (ITC) announced in November’s 2022 Fall Economic Statement, with the introduction of a 30% Clean Technology Manufacturing Credit and a 15% Clean Electricity ITC, which expands eligibility to non-taxable entities. In combination with the recapitalisation of the Smart Renewables and Electrification Pathways Program (SREP), these initiatives are being recognised, in Canada and abroad, as an indication that Canada understands the vital role energy storage will play in Canada’s energy transition.
These mechanisms represent critical steps on Canada’s part to keep pace with the United States’ ITCs through the IRA, which are estimated to increase US storage deployments by as much as 24% over the next five years.
It’s not hard to imagine in the context of a 68% increase in energy storage worldwide in 2022, with additional commitments from several markets totaling 130GW by 2030.
Recent major milestones for Ontario and Alberta
Canada has seen several landmark developments at the provincial level as well, including the government of Ontario’s October 2022 announcement of one of largest competitive energy storage procurements in North America at 2.5 GW, with the first tranche of projects announced on 16 May.
This milestone was further augmented by this spring’s announcement of the 250MW Oneida Energy Storage project moving toward commercial operation in Ontario, as the project partners achieved financial close with key long-term contracting in place.
In addition to the 100MW already installed in Alberta, the province has projects with a total capacity of more than 2500MW in the queue for connection.
Elsewhere, on the east coast, NB Power is soliciting proposals for 50MW of energy storage projects in New Brunswick and Nova Scotia recently proposed amendments to the Electricity Act to enable grid-scale battery contracts and procurements.
Each of these actions at both the federal and provincial level are important steps forward for Canada to achieve its ambitious net zero goals.
Coming soon: the 250MW/1,000MWh Oneida project in Ontario. Image: NRStor.
Canada still needs much more storage for net zero to succeed
Energy Storage Canada’s 2022 report, Energy Storage: A Key Net Zero Pathway in Canada indicates Canada will need a minimum of 8 to 12GW of energy storage to ensure Canada achieves its 2035 goals. Moreover, while each province’s supply structure differs, potential capacity for energy storage was identified in all Canadian provinces, meeting demand needs and optimizing generation, transmission, and distribution assets.
Long-duration storage should be a key component of Canada’s energy future
Additionally, while it is important we act and act quickly to deploy energy storage to meet the evolving needs of Canada’s energy system, we also need to act with an eye toward the long-term beyond 2035.