A new study released by the Independent Electricity System Operator (IESO) on Friday reveals that all of Ontario’s incremental electricity needs during the next decade can be cost-effectively met by distributed energy resources (DERs), such as smart controls that shift electricity demand from peak to off-peak periods, solar energy, stationary batteries, and EV batteries combined with bi-directional chargers.

As the study notes “there is ample cost-effective DER capacity to meet or exceed all incremental system needs under all scenarios”, which confirms Energy Minister Todd Smith’s belief that Ontario doesn’t need new gas plants to keep our lights on.

But there’s a catch. The study authors (the very reputable Dunsky Energy) note that the IESO’s current policies and practices, particularly its unwillingness to pay fair market value for DERs is a major barrier to increasing use of these climate-friendly resources.

In particular, they note that Ontario’s system does not adequately compensate DERs for all the services that they provide to the electricity grid. As the report notes, “there are opportunities to improve the financial attractiveness to DER providers by compensating them for all the system benefits that DERs provide.”

In addition, the report points out that the IESO’s programs lock out many DER measures through cumbersome program design and rules (red tape) that prevent smaller DERs from being used (see pages 75-78 for more on these). In other words, the potential is there, but right now the will to procure them is not.

Interestingly, the report also notes how increased electrification will increase the ability of DERs to offset increases in our peak hour demands for electricity. For example, more electric cars on the road means more batteries that could be used for storage, and to supply power back to the grid during peak demand hours through Vehicle-to-Grid integration. Similarly, the authors note that many new electrical appliances, like heat pumps, can be combined with smart controls and storage devices to again make electrification work for the system rather than adding more strain.

It’s a different vision of Ontario’s energy future than rebuilding half-century old nuclear plants and backing them up with polluting gas plants. And it is an approach that would be significantly lower cost – financially and for our climate – compared to where Ontario is headed now.

What you can do

Please send a message to Energy Minister Todd Smith telling him that Ontario needs to get serious about tapping the full economic potential of distributed energy resources.

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