Electricity grid capacity is critical to enable the buildings and transportation sectors to move away from fossil fuels and reduce greenhouse gas (GHG) emissions. Energy management specialists stress the importance of infrastructure investment to support clean generation, stable transmission and the integration of smart technologies that will be central to monitoring demand and dispatching a complicated supply mix.
Conservation and demand management (CDM) is likewise considered key to ease the pressure on the electricity system as Canada pushes toward a targeted 40 to 45 per cent reduction in GHG emissions relative to 2005 levels over the next eight years. In Ontario, building decarbonization is expected to bring new variables to the already byzantine mechanisms for allocating global adjustment (GA) costs, further bolstering the case for simply reducing electricity loads as much as possible.
Large commercial customers participating in Ontario’s industrial conservation initiative (ICI) program pay GA costs linked to their electricity use in the five hours of system-wide highest demand during the period from May 1 to April 30. A wide-scale switch from gas boilers to electric heat pumps — as envisioned in Canada’s emissions reduction plan and related decarbonization strategies — could influence when those five peaks occur and make them trickier to predict during the transition period.
“If we go to electrification, we’re going to see a higher load in the wintertime,” Scott Rouse, managing partner with the consulting firm Energy@Work, observed earlier this year during the annual seminar the Building Owners and Managers Association (BOMA) of Greater Toronto sponsors to discuss the GA and electricity cost issues. “We’re accustomed to those peak hours in the summer, but we may start seeing more in the winter. That’s another scenario that you need to think about.”
“The capacity of the grid to allow for more electrification really depends on our ability to manage the peaks,” added Jeff Ranson, BOMA Toronto’s senior director of energy, environment and advocacy.
The Canada Green Building Council (CAGBC) points to the same likelihood in its 2021 evaluation of the technical requirements and costs of deep carbon retrofits. Researchers found that buildings of 1990s’ vintage, in particular, could experience higher annual peak demand and a shift from summertime to wintertime peaks when heat pumps replace gas-fired space and domestic hot water heating. Fuel-switching could even necessitate expansion of a building’s electrical capacity, although that risk was deemed to be rare.
“The anticipated energy demand shifts illustrate the importance of demand reduction strategies to minimize both project costs and the potential increased strain on regional electrical grids,” the CAGBC report states. “If a building owner pursues electrification measures without first investigating and mitigating potential peak-demand increases, project costs could soar as a result of needed building electrical distribution upgrades and localized improvements to electrical grid distribution.”
Alternatively, early adopters in Ontario might see cost benefits while summer peaks are still the norm, provided they qualify as Class A customers — with annual average monthly demand of at least 1 megawatt (MW) — to participate in the ICI program. Edward Newton, an energy analyst with Energy@Work, told BOMA Toronto webinar attendees that’s been the case for some electrically heated residential buildings in his firm’s client base.
“With the current system the way it is, they’re taking great advantage of that because all the peaks are occurring in the summer and they’re seeing lots of savings in the winter paying the Class A (GA) rate,” he reported. “For Class A customers, there are definitely advantages for electric heating.”
Multiple challenges in preparing to accommodate net-zero buildings and vehicles
Rob Edwards, private sector business manager with Ontario’s Independent Electricity System Operator (IESO), told webinar attendees many of these issues are being examined in a current IESO consultation and study.
“We are quite aware of folks pursuing GHG reductions and decarbonization through electrification. The broader public sector has been pursuing this quite a bit and now large commercial, retail and hospitality are doing so,” Edwards said. “ESG (environmental, social, governance) is going to really impact the grid. So we’re quite aware of it.”
An intimidating array of complicated and capital-intensive components will have to come together fairly quickly if the electricity system is to be net-zero-ready in line with national and global targets. Beyond an ample supply of low-carbon generation, it needs to be effectively delivered to users with controls in place to safeguard against the inherent fluctuations in some forms of supply — notably, wind and solar. Energy storage is tapped to be pivotal, but it’s still at an embryonic stage that will have to be vastly and rapidly scaled up to be economically feasible and widely integrated into the system.
Tallying some of the challenges during a recent online media briefing sponsored by the United States Energy Association, Andres Carvallo, an engineering professor and specialist in smart technology applications based at Texas State University, noted that the U.S. currently has about 1,100 gigawatts of electricity production capacity nationwide. Meanwhile, the 280 million registered automobiles in the country would theoretically represent 28,000 gigawatts of demand if they were all somehow magically converted to electric vehicles (EVs) with 100-kilowatt batteries.
“We are going to add 28,000 gigawatts (of demand) in the next 20 to 30 years. This needs to be done in a very, very, very well-integrated and thoughtful way,” Carvallo cautioned. “Otherwise, we will start having serious brownouts.”
Also participating in the briefing, John Bear, chief executive officer of the Midcontinent Independent System Operator (MISO) reported there is about USD $30 billion of investment in transmission expansion and upgrades slated or underway in the jurisdiction, which encompasses 15 U.S. states and Manitoba. That’s largely to make way for new renewable generation caught in an “interconnection queue” as it’s added to the system.
“We’ve got to get the transmission in place so we can allow that interconnection and get rid of the congestion,” he said.
The gross required investment is smaller in Canada, of course, but the federal commitment to phase out most fossil-fuel-fired generation by 2035 arguably makes enhanced electricity grid capacity an even more urgent priority. Much hinges on commercially viable energy storage and smart technology.
“Broadband is the single most important missing piece of the whole thing being stitched together,” Carvallo asserted. “All this needs to be controlled real-time. If it’s not, it doesn’t matter what we do; it doesn’t matter how much energy we pump; this grid is never going to deliver what we need.”
In the interim, he urges governments, system operators and utilities to prioritize energy efficiency and make demand response programs more lucrative. “A negawatt should be compensated pretty similarly to the price of a megawatt. It doesn’t happen. This is something that should be changed to entice behaviour change at large scale,” Carvallo said.
Barbara Carss is editor-in-chief of Canadian Property Management.
