Battery Storage will Save Ontario Ratepayers as Much as $760 million and Hell is about to Freeze Over
It appears, those who monetarily benefited from the GEA imposed on Ontario’s ratepayers by the McGuinty led Ontario Liberal Party in 2009 are back seeking more ratepayer dollars.
NRStor and Six Nations of the Grand River Development Corporation (SNGRDC) have teamed up in an effort to obtain a contract from IESO. The latter, SNGRDC already have a significant portfolio of investments in 13 wind and solar projects including the 230 MW Niagara Regional Wind Farm. NRStor was founded by Annette Verschuren, former CEO of Home Depot and NRStor’s claim to fame is “energy storage” and as such they received several contracts from the OPA (absorbed by IESO) under the GEA. A former senior executive of IESO, Kim Warren is one of the three members of their Board of Directors and he presumably still has some pull within IESO.
It should be obvious that both SNGRDC and NRStor have benefited greatly from the contracts they received from the IESO to the detriment of Ontario’s households and businesses of all sizes and sectors—but they want more!
NRStor appear to be a Tesla agent in Canada and it is probable the project currently in the planning stages will use Tesla’s “Megapack” battery storage for the jointly owned “Oneida Energy Storage Project” (OES) which is a proposed 250MW/1000MWh storage facility.
Driving up Electricity Costs with our Tax Dollars
The OES is not the only “energy storage” project in the early stages as TC Energy, who sold their Ontario gas plants to OPG last year are also in the process of seeking a contract to create a “pumped storage” 1000 MW unit in Meaford, Ontario using water from Georgian Bay. Needless to say, the locals in and around the chosen site are fighting hard to preserve the local landscape and the affected area of Georgian Bay! In TC Energy’s case one should suspect they are trying desperately to obtain “carbon credits” to help offset the upcoming rising costs of both the “carbon tax” and the “clean fuel standard” (another tax) the Justin Trudeau Government has undertaken. Those taxes may make TC uncompetitive with other global energy companies.
The opportunity to make money in the “OES” case is twofold in that they will purchase power when the HOEP (hourly Ontario energy price) is low and sell it back either at a contracted price or when the HOEP is higher during high demand hours. One assumes they also want “carbon credits” they can sell to others for additional revenue.
Insofar as the two partners of the OES are concerned it looks to be simply a means to obtain more ratepayer dollars! In NRStor’s case the benefit will accrue to their new New York owners, Blackstone Energy Partners who purchased them in the spring of 2020 and is itself a subsidiary of Blackstone with $571 billion in assets under management.
Examining the Project Overview suggests in addition to the promise to save us ratepayers $760 million the energy storage project will also result in a “4.1 Million tonne reduction in CO2”. Not sure how buying surplus energy in Ontario that is basically emissions free will save those 4.1 million tonnes but if they say it’s a perfect solution, we should suspect both politicians and public bureaucrats will be swayed by those claims. One wonders if the politicians and bureaucrats recall the words of George Smitherman, former Ontario Minister of Energy when he told us the GEA would only raise electricity rates by 1% and it would create 50,000 jobs! His claims were praised by many ENGO at that time. Ontario’s ratepayers are well aware neither promise came to pass!
It is evident already that politicians and bureaucrats are excited about the OES project. Catherine McKenna, Minister of Infrastructure and Communities had the CIB (Canada Infrastructure Bank) sign an MOU with OES and shouted out: “Renewable energy projects in partnership with Indigenous communities – like the Oneida Energy Storage project with the CIB, Six Nations of the Grand River Development Corporation and NRStor – are a great example of how our economy will grow in the future and how forward-looking investments can help Canadians achieve their economic and environmental goals,” One should assume the Minister and the bureaucrats at the CIB did not bother to determine the emissions required to manufacture the batteries nor the cost of recycling them!
It also appears from the “Project Review” that perhaps some politicians and bureaucrats in Ontario have also endorsed the project as Greg Rickford, Minister of Energy, Northern Development and Mines, Minister of Indigenous Affairs issued the following statement: “Ontario is uniquely positioned to take advantage of energy storage solutions and I congratulate the Six Nations of the Grand River Development Corporation, NRStor and the Canadian Infrastructure Bank on this important project milestone today.” To top that off IESO receives many laudatory mentions in the OES review suggesting their plan to secure a contract will be an easy one with the help of Kim Warren’s inside knowledge.
For some reason the review uses 2017 data which is now quite dated. It also notes; “Ontario’s Auditor General has confirmed using forecast data from the IESO that the province is expected to continue to experience on average 2.8 TWh of Surplus Baseload Generation (SBG) per year from 2022-2032”. Bearing the foregoing in mind, one wonders why adding storage of that surplus, storing it for several hours and then selling it back at a price higher than purchased will somehow save us overburdened ratepayers $760 million? Buy low, sell high, appears to represent an additional cost to ratepayers while rewarding OES!
The OES appears to be simply another Trojan Horse* that will serve to further undermine the Ontario economy!
* The Trojan Horse is a story from the Trojan War about the subterfuge the Greeks used to enter the independent city of Troy and win the war.