ENGIE Services

Plugging in to the benefits of energy storage

Are on-site batteries the next "green ticket" for bulk-metered building owners?
Thursday, November 15, 2018
By Erin Ruddy

A dramatic rise in energy costs and strict sustainability mandates have been spurring business owners to explore innovative, energy-saving solutions for decades, thus launching the ‘cleantech’ industry to new heights. But just how viable are some of the ground-breaking methods we’re reading about today, and at what point should budget-minded, risk-adverse apartment owners feel confident enough to take the leap?

One of the biggest game-changers in the multi-residential sphere has been sub-metering, a system that allows landlords to regulate energy consumption by putting payment into the hands of tenants. This approach has not only prompted conservational behaviour, but when combined with HVAC upgrades, lighting retrofits and other building improvements, it has led to substantial savings for multi-res building owners in the realm of 30 per cent.

For those pursuing higher performance, additional cutbacks in consumption have come from the use of renewable energy sources, like solar and wind, but the lack of intelligent management systems to store and deploy surplus energy has inhibited these intermittent sources from readily gaining favour.

Enter behind-the-meter energy storage systems, a not-so-new technology that’s been making waves in the cleantech space. Simply put, energy storage is the process of capturing energy produced at one time to use at a later time. Business magnate Elon Musk has been popularizing this method since the launch of the Tesla electric car in 2003, and more recently, with the Powerwall “at-home” battery. But Musk isn’t the only one touting the merits of this renewable energy solution. As we head into 2019, developers and distributors worldwide are working toward its mainstream integration.

What’s changed is the advent of intelligent management software, enhanced regulatory measures and design improvements that have incrementally lowered the cost of systems, all things combined making market conditions for customer-located energy storage ripe. Today, commercial building owners who are seeking more control over their energy costs and increased reliability have begun to take notice.

Leading the way is Starlight Investments, a privately held Canadian real estate asset management company with more than 36,000 multi-residential units across North America. In August, Starlight announced it had partnered with Peak Power Inc., an energy storage service provider, to install up to 2350kW / 4700kWh of energy storage systems. Used to target Ontario peak demand charges at Bloor Islington Place in Toronto, the behind-the-meter battery systems reached commercial operation earlier this year and are on their way to generating a projected electricity bill savings up to 15 per cent.

“We are delighted to be one of the first commercial building owners in Canada to install behind-the-meter battery energy storage,” said Perry Rose, Executive Director, Procurement and Technical Services, Starlight Investments. “Innovative technology, such as energy storage and Peak Power’s software, are providing options to building owners for better ways to manage their day-to-day energy needs.”

The installation at Bloor Islington Place is one of six sites Peak Power installed using funding from the Sustainable Development Technology Canada Grant. SDTC is a foundation that supports Canadian research and development projects that harness clean, innovative technologies with viable, sustainable potential. Once complete, the six sites will be aggregated into a “Virtual Power Plant” to provide additional services to the Ontario grid. Peak Power also has a site using a Tesla Energy Storage System at the Thomson Building at 65 Queen Street West in Toronto.

“Starlight is committed to sustainability for the benefit of all stakeholders including residential and commercial tenants, as well as visitors to our properties,” said Rose. “We continue to seek new and innovative ways to improve our carbon foot print and minimize energy and physical waste. As this technology develops, we’ll certainly be watching for opportunities to integrate it on a larger-scale.”

Targeting the Global Adjustment

As utility consumers are all-too aware, the Global Adjustment fee isn’t cheap. Accounting for up to 80 per cent of the commodity cost of electricity, the GA is used to cover the difference between the market price and rates paid to regulated and contracted generators, and to pay for conservation and demand management programs. For customers with a least one megawatt (MW) of demand, Global Adjustment charges are calculated by looking at total energy use as a share of the total energy use during the five hours of the year when the overall demand for electricity is at its highest—known as the “5 coincident peaks.”

Forecasting these five peaks is complex. Analysts have relied on spreadsheets, regression analysis and general intuition to predict when peak events will occur. This was one of the driving factors that prompted Starlight Investments to pursue a partnership with Peak Power.

“The electricity grid is changing due to the growth of new technologies, such as solar power and electric vehicles,” said Matthew Sachs, Chief Operating Officer with Peak Power. “Battery energy storage can help balance the grid by providing fast-acting response to short-term fluctuations in supply and demand, such as peak demand events, which put a strain on the grid. Installing energy storage at your building can help you save up to 25% on your electricity bills, while also providing grid services to utilities, reducing GHG emissions from electricity production, and improving grid resiliency.”

Sachs also noted that 3280 Bloor was outfitted with the Building Insight Platform, which consists of internet enabled sensors and advanced analytics and forecasting for a “complete energy management solution.”

So, when will we start seeing energy storage systems permeate the apartment sector?

According to Sachs, the applicability of the technology depends on the utility tariff structures which affect project economics. “Currently this technology makes the most sense in Ontario for Class A customers, which are large energy users,” he explained. “The tariff structures have been changing, however, and the trend has been to allow more participation.”

Illustrating this, Sachs pointed to the lowering threshold that classifies a Class A customer. “It used to be 5MW, then it was reduced to 3MW, then 1MW and most recently 0.5MW for manufacturing sites. We believe that in the future everyone will be able to participate, but that will take some time for the regulatory structure to change.”

Another key for multi-residential apartment buildings is that the technology can only be implemented if it’s a bulk-metered building. With plenty of those still in existence, this might be the option hesitant owners have been waiting for.

As a rental housing provider, why should energy storage batteries be on your radar as a future energy-saving solution?

1. Batteries can improve data centre reliability.
2. They can provide power even without a cooling load.
3. They are a cleaner alternative to on-site fossil fuel generators.
4. They are perfect for dispensing energy for short durations during power outages.
5. Prices continue to drop as the market continues to develop.

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