Problem

Ontario Electrical grids generate more electricity than Ontarians need. Since 2009, Ontario has given away $6 billion in surplus electricity to the U.S., while the rate for off-peak electricity here has risen by 150 per cent.
The auditor general of Ontario estimates that the province has already lost close to $2 billion on such exports. Data from the Independent Electricity System Operator (IESO) shows Ontario now loses, on average $24,000 per operating hour on such sales, totaling $200 million annually. (Source: Salar Mehrad,P. Eng., MBA).

Why there is surplus energy in Ontario

At night and on weekends, Ontario nuclear reactors produce more power than we need. Since nuclear reactors cannot reduce their output during off-peak hours, we have to export their surplus production to our American neighbours at very low prices. In fact, we often have to pay them to consume our excess nuclear production (Source: Salar Mehrad, P. Eng., MBA).
Policy changes were aimed at eliminating coal plants and significantly reducing carbon dioxide emissions, improving lighting, appliance and insulation efficiency standards, peak demand reduction, energy conservation programs, and refurbishing nuclear units. Ontario’s Policies led to an 80% reduction in CO2 emissions by 2016 when compared to 1990 levels – this is way ahead of the 2050 international goal. All this, coupled with the 2008 recession reducing demand growth resulted in significant excess capacity. So much excess capacity that surplus electricity is exported at incredibly low rates of about 1.6 cents per kWh in 2016 (Source: OSPE).

Ontario High Electrical Energy Prices

Ontarians pay more for power than any other province in Canada. This is a result of many policy changes
made over the last 10 years. (Source: Salar Mehrad, P. Eng., MBA).

How we got here

Essentially, the quick answer to this is: policy changes, upgrading infrastructure, and signing fixed long term agreements with private energy companies. The two cancelled gas plants did drive up rates a bit, it’s not very significant in the grand scheme of things. (Source: Salar Mehrad, P. Eng., MBA).

Ontario Surplus Electricity - 2016

Ontario is not making full use of its low-carbon electricity supply

Ontario’s nuclear and renewable resources generate more power during some off-peak hours than Ontario has been able to use. Ontario cannot save money by turning off this power, because:
• Renewable power (e.g., wind) has extremely low operating costs; and
• Nuclear plants cost virtually the same whether they are making power or not.
Instead, Ontario curtails (i.e., turns off and wastes) or exports some of its surplus clean electricity. The electricity that Ontario curtails (5% of potential production in 2016) or exports (8%) is a resource that Ontario could make better use of. For 2017, preliminary data indicates that the province curtailed 7% and exported (net) 9% of the electricity produced.
More than half of the surplus is exported for more than it costs to produce that power (its marginal cost), but the rest cannot presently be exported at a financial benefit and so is curtailed.
Curtailment of surplus low-carbon power provides no financial, environmental or other benefit to Ontario. Yet the Independent Electricity System Operator (IESO) projects that it will continue to curtail surplus clean electricity for many years. (Source: Environmental Commissioner of Ontario: 2018 Energy Conservation Progress Report, Volume One).

Projected curtailment of Ontario surplus electricity, 2018-2035

How long will Ontario have an electricity surplus?

The Independent Electricity System Operator (IESO) projects that the province’s surplus will be high through 2020; fall during the Bruce and Darlington nuclear refurbishments from 2021 to 2024; and stay low after the Pickering nuclear station is retired (2024). This projection may assume implementation of some of the methods described in this chapter, such as off-peak electric vehicle (EV) charging. However, the Long-Term Energy Plan does not plan for the increase in low-carbon electricity supply that will be needed to electrify more of the province’s energy sector, as required by Ontario’s climate law. If no other measures are taken, increasing total low-carbon electrical capacity could result in additional off-peak electricity production, i.e., a larger surplus and more curtailment than the IESO predicts. (Source: Environmental Commissioner of Ontario: 2018 Energy Conservation Progress Report, Volume One).

How can Ontario make full use of clean off-peak surplus electricity and prevent it from going to waste?

Instead of curtailing or exporting “surplus” low-carbon off-peak electricity, Ontario should use this power productively within the province.
Options include:
• Storing surplus power and converting it back to electricity, to return to the grid when needed or to power electric vehicles;
• Converting surplus electricity to other forms of energy that are easier to store, such as hydrogen, methane, heat or cold; and/or
• Allowing Ontario individuals and businesses to buy excess power inexpensively.
These actions can also reduce peak demand. To facilitate these solutions, regulatory changes will be needed to encourage and support technological innovation, particularly in the electricity distribution sector. (Source: Environmental Commissioner of Ontario: 2018 Energy Conservation Progress Report, Volume One).

Storing electricity as heat or cold

Energy storage can also be accomplished (often at a lower cost) by withdrawing surplus electricity from the grid and storing it as heat or cold. As shown above, thermal storage is more common around the world (at 3.3 GW) than battery storage (at 1.9 MW).
Examples of thermal storage include: making ice or pre-cooling water for air conditioning (chillers); or heating domestic hot water tanks. Ceramic heaters can use off-peak, nighttime electricity to keep a home warm all day. There is a natural link between Ontario’s need to electrify space and water heating to reduce GHG emissions, and the potential to do so (at least in part) by using surplus off-peak electricity.
A great example of thermal storage is the Heat for Less Now initiative in the City of Summerside, Prince Edward Island (P.E.I.). It installs purchased or leased Electric Thermal Storage (ETS) systems, such as water heaters, room/space heaters and furnaces, in homes to take surplus green energy (mostly from wind power) and store it as heat. The ETS system is controlled remotely by Summerside’s utility using smart grid technologies. The utility uses cheap off-peak electricity to fully heat the ETS systems. The stored heat warms the homes or water heaters all day, so they use much less power during the more expensive peak hours. (Source: Environmental Commissioner of Ontario: 2018 Energy Conservation Progress Report, Volume One).

How BKR Energy can support utilities

BKR Energy smart technology can switch the residential HVAC system load from furnace to ASHP during off-peak hours. Since ASHPs consume electricity, this results in energy cost saving for householders and supporting utilities by consuming off-peak hour’s clean surplus energy.

Advantage Power Pricing (APP)

Graph and Image Source: https://www.powerstream.ca/innovation/advantage-power-pricing.html

BKR Energy technology and APP interaction

Based on APP plans, the electricity rate is extremely low (almost free) for householders during midnight and 6:00 am.
As a result, the energy cost saving of BKR Energy switching technology can be manifold.