Energy Storage Solutions for Cannabis Operations

ENERGY SOLUTIONS FOR THE CANNABIS INDUSTRY

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With the cost of electricity ever increasing and the pricing mechanisms that make up our utility bills, Energy Storage might have a role to play in reducing your expense.  For medium and larger companies in Ontario, including Cannabis Licensed Producers, the global adjustment (“GA”) amount is a utility bill line item that needs addressing.  GA represents the difference between the costs of running the electricity system and the amount recovered from the wholesale market.  This includes the cost of building power plants in the province, the Independent Electricity System Operator (“IESO”) and including the cost of provincial conservation programs.  This ensures the IESO has enough power to reliably supply all the needs of the grid.

Global Adjustment (“GA”)

The IESO pays power plants for electricity based contracted rates either from a feed-in tariff contract,  power purchase agreement or another arrangement with the government.  These contracts can last over 20 years in duration. The “Contracted Rate” for these assets are typically higher than the Hourly Ontario Energy Price, or HOEP. The difference between the HOEP and Contracted is a major component in the GA fee that the consumer pays.  Currently the bulk of the commodity cost for electricity is GA and only a small portion is the HOEP.

There are two methods that GA is charged to electricity customers.  For most customers, GA is charged on a per kWh basis, meaning that a facility’s contribution to paying the GA is proportional to the amount of energy they use.  For very large Industrial consumers, the Industrial Conservation Initiative (ICI) was developed to assist in reducing the GA cost. The ICI allows qualified consumers to pay the GA based solely on their contribution to the top 5 peak hours in Ontario over the last year.  The IESO has recently expanded the ICI to include more  industrial consumers and included the option for smaller facilities to opt into the program.  Almost all Licensed Producers (“LPs”) would have an energy profile that would qualify them for the ICI program.

This is where Energy Storage can assist an LP.  

These are the items that ORTECH can assist you with:

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Incentive Management

ORTECH can review your current electricity usage situation and determine what government incentives might help you with your next energy management initiative.  These incentives include the ICI, Local Distribution Company programs, the GreenON funds and other programs run by the IESO. The ORTECH team can assist you in applying for the correct incentives, and start the application process.  Then, ORTECH’s other divisions, like Kontrol Energy and Efficiency Engineering can assist you with your efficiency projects or energy management programs.

 

Peak Management Support

The problematic part of reducing your GA is determining your top 5 peak hours.  By analyzing your utility bills and electricity consumption, including other market data and forecasts, ORTECH can predict your demand peaks and alert your organization to curtail your electricity use, either through an energy storage solution or other reduction methods. By implementing this type of tactic, your GA fee will be reduced.

 

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Energy Storage Implementation

Using a large-scale, lithium-ion battery solution, customers participating in the ICI program (peak demand of 3MW or higher ) or who have opted into the ICI program (peak demand of 500 kW to 3 MW) can employ an energy storage system onsite. One benefit of doing this is avoiding costly power interruptions, better power quality and avoid consuming power during demand peaks. Using this tactic, your firm can minimize the amount of GA paid by using the energy storage system. 

 

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Why Energy Storage?

  • Demand charge management – LPs that have significant demand charges will benefit.

  • Peak shaving – store low-cost electricity and use it during peak hours; thus avoiding higher rates.

  • Renewables integration – Generate your own power using solar, store it and use it when the peak hour costs dictates.

  • Power quality - protect against power fluctuations and outages from the grid that can damage valuable systems

  • Emergency backup systems – protect against power outages.

  • Highly scalable systems – there is no limit to the scale of your system. Most vendors provide scalable systems that just add on.

 

HOW Can ORTECH assist you?

ORTECH provides energy storage services that have real business implications.  If you are looking to reduce your electricity bill, ORTECH can help. ORTECH has a detailed understanding of the market drivers concerning energy storage in Canada.  ORTECH can provide the following services:

  1. Comprehensive analysis of your electricity load and spend.

  2. Development of solutions, with financial models that are actionable.

  3. Business case development for each solution.

  4. Implementation and operation of energy storage solutions.


Get started today, contact ORTECH to begin the road to lower electricity costs. 

For more information, please use the contact form below. 

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