Thank you, Mr. Chair.
Thank you for having me here today.
I am Justin Rangooni, the executive director of Energy Storage Canada.
Energy Storage Canada is a not-for-profit organization serving as Canada's national trade association dedicated exclusively to advancing the growth and market development of the energy storage sector. Our primary goal is to leverage the diverse abilities of all types and all durations of energy storage to accelerate Canada's ongoing energy transition and support the country's clean-tech economy through advocacy, education, collaboration and research. This technology-agnostic approach has allowed us to assemble a broad membership of more than 90 organizations and stakeholders that represents the complete value chain of Canada's energy storage industry.
As you are likely aware, energy storage encompasses any technology or process capable of capturing surplus energy when it is not needed and storing it for later use, releasing it as required. These technologies include batteries of various of chemistries, such as lithium, zinc and vanadium variants, as well as mechanical methods like compressed air, flywheels, electrolyzers, pumped storage and thermal solutions employing media like molten salts. Depending on the specific technology employed, storage can offer a range of benefits to the grid, spanning from real-time operations to support lasting weeks or even months.
Since assuming this role in 2019, I have witnessed a remarkable transformation in Canada's energy storage sector. My initial mandate was to convince decision-makers that energy storage is a ready technology with immense potential that extends beyond pilots.
Today we are witnessing energy storage resources being procured and deployed across the country, from Ontario recently hosting the largest energy storage procurement in Canadian history to Alberta energizing over 100 megawatts of energy storage capacity to other provinces like Nova Scotia, Saskatchewan and British Columbia, among others, setting ambitious targets for energy storage.
The growing resonance of energy storage is grounded in the profound shifts occurring in electricity supply, as well as evolving demands. Grid operators now require additional tools to manage the transformation to a decarbonized, electrified grid effectively. Energy storage resources of all durations not only enhance the utility and efficiency of existing assets but also provide versatility for the system by providing a spectrum of grid services, reliability and affordability. In the most recent Ontario capacity procurement, energy storage resources came in at a lower cost than the procured natural gas projects.
Energy storage contributes to decarbonization initiatives by enhancing the efficient utilization of clean energy assets already integrated into the grid, including wind, solar, hydro and nuclear power. This, in turn, further reduces the dependence on carbon-intensive fuel sources.
Energy Storage Canada undertook a commissioned report last year examining the amount of energy storage needed to align with the government's ambitious 2035 net-zero goals. The findings of the report indicated that a minimum range of 8 to 12 gigawatts of storage would be necessary to achieve this goal.
The United States' Inflation Reduction Act has played a pivotal role in fuelling remarkable growth within their energy storage sector, resulting in record-breaking new capacity installations during the second quarter of 2023; therefore, the importance of finalizing details surrounding Canada's investment tax credits cannot be overemphasized. The gravitational pull of the IRA within the clean energy sector is tangible, and it is imperative for Canada to recognize that these policy instruments within Canada exist within a globally competitive environment where both time and resources are scarce. We must keep pace with global efforts. It's better yet if Canada can take a leadership role.
In the immediate term, Canadian project developers find that they must vie for limited financial investments. Any financing allocated to U.S. projects due to delays or uncertainties in the market results in challenges to the system.
Shifting our focus to long-duration energy storage, which means technologies that can store for weeks, months or even seasons, these LDES technologies can play a pivotal role in advancing decarbonization efforts, significantly reducing reliance on peaking fossil fuel generation by storing clean electricity for extended periods.
In the United States, the Department of Energy introduced the “Liftoff Reports” aimed at facilitating market and regulatory mechanisms while promoting cost reductions for LDES technologies. We strongly encourage the federal government to take a similar approach and explore ways to enhance LDES technologies within Canada, including an ITC for long-duration energy storage, along the lines of similar tools like carbon capture storage at 50%.
We are currently engaging in a report, which we're happy to share with you, on the value proposition for LDES.
Thank you for the opportunity to address the standing committee, as we believe energy storage technologies of all types and durations are critical to Canada's energy transition.