Thank you for the opportunity.
My name is Elad Barak. I work with a company called eCAMION, an energy storage system company, just to put a context to my testimony.
I'm going to go through the questions I received and give some of our thoughts about how we perceive things. I'd be happy to answer any questions afterwards.
The first two questions that were given were, “What are the risks that we're facing?” and “How can the government help us with them?”
We have four main risks. Three of them are more directly related to us, and one is to renewable energy in general.
The first is that energy storage systems are not used yet on a large scale. We work with industry partners. When you want to put in an energy storage bigger than the sizes we would put in homes, there's a reliability issue. We find often that it's hard for us to work with clients, as they are afraid that this technology has never been used before. Then there's the risk associated with the financial issues. The way to tackle this—and it's something that happens, and we'll talk about it afterwards—is continuing to do demonstration projects with grants from the government. That's something that has helped us a lot in the past, and it's helping us now as we're actively working through government grants.
The second issue is regulation. There is not a lot of regulation around energy storage systems. When we need to talk about safety issues with our clients, they don't know whether what we're saying will be accepted by utilities and by the government. We work closely with utilities, but there is always a question of whether regulation will be a problem or not. There is just not enough.
The third problem is related very much to the first one; it is the financial issue. Most of our projects are very high in capex. While there is a return on investment, it's very long-term, maybe more than 10 years for the ROI to come, when we're competing with other technologies that do not require this technology—for example, just a generator instead.
For this problem, we have some suggestions we can dive into later. Just as there is BDC, maybe we could have a bank that helps more with financing projects such as energy storage system projects or renewables in general.
The fourth issue is that energy storage systems often go along with other renewable projects. For example, when companies want to invest in solar or wind, the problem is that they're not always going to have energy. If there is no sun or no wind, they then need to mitigate the difference. To really get adoption of solar and wind, you need to have an energy storage system. Since our systems are expensive, a financial benefit is often needed. We believe that some kind of government support or regulation can help.
Another thing in this regard is that there are many PPAs for solar, but when solar production is out, energy storage doesn't really achieve the goal of being renewable, because you can't use solar all the time for exactly that reason. The government will buy energy sometimes when it doesn't need it, just because of the agreements.
The other question concerned good instruments to use, working or not. As I stated at the beginning, we have a lot of help from grants. We're currently in the last stages of securing another grant with the government, which gives a lot of oxygen to our company. I would say the pros about them include that they are very helpful and help us get partners involved, because we're de-risking their financial risk while they still have the technical risk.
Among the issues with them is that the grant applications have short timelines. When we do a project of a million dollars or more and we need to get our partners to join us, getting all the approvals with them will take more than a month or two. Often we work with utilities, as we're in the energy sector, and they work a bit more slowly and need a lot of approvals, as they are not private. The grant timing needs to adjust sometimes, we feel, for co-operating with these types of organizations that require more than a month or two to approve a deal of high value.
The other thing that was asked was to give examples of other things we know or other help that can be used. We're not really sure about things in Canada, but we know, for example, that there is a lot of innovative decision-making in other countries. In Germany, for example, they're allowed to put a few energy-storage systems together and treat them as one, and by doing that, sell more energy back to the grid.
Not allowing these kinds of things in Canada, or at least in Ontario, prevents us from selling smaller products to our customers and giving them another financial benefit to help motivate them to use our products. Sometimes a bit more progressive thinking about this stuff can really help us.
That's just one example we had. Mainly we believe there's a bit more improvement to do with the grants.