Electric future: what it takes to get rid of fossil fuels

When the Town of Parry Sound decided to become Canada’s first net-zero community in 2019, the move represented much more than an ambitious gesture aimed at a distant point in the future. The local energy grid was so tapped that the municipality could not accept any new industrial development or accommodate significantly more electric vehicles (EVs).

Parry Sound officials first looked at reducing energy needs by installing more LED lighting or replacing aging HVAC systems. But, as Jennifer Montpetit, a senior planner at Lakeland Power, the region’s municipal grid operator, says, “That wouldn’t be enough to meet their goals.”

Instead, Lakeland and the municipalities it serves (including Bracebridge and Huntsville) opted for something much more ambitious: to build a microgrid to provide incremental renewable energy using a large-scale solar installation on an old landfill site, several large stationary Tesla batteries, public EV chargers, and energy optimization devices connected to hot water heaters.

These so-called “distributed energy resources” (DERs) are in turn controlled by a smart-grid software platform built by Opus One Solutions, which continuously monitors demand and manages the power flowing through the system.

Parry Sound’s microgrid project illustrates why local distribution networks of varying ages and maintenance levels will require extensive new investment to meet the additional demand for electricity that will arise as society moves away from fossil fuels. “A lot of money needs to be invested to support the charging of electric cars,” said Jamie Cameron, KPMG’s national infrastructure leader for future mobility. The other driver behind such investments, he adds, is the increasing risk of climate-related natural disasters. “Distributed generation also supports that resilience, so you get a double benefit.”

What the ‘electrification of everything’ will mean

If phasing out fossil fuels is the primary solution to the climate crisis, then the broad transition to clean electricity cannot come quickly enough. In a major report last year, the International Energy Agency (IEA) concluded that the path to net zero by 2050 must include far-reaching electrification using renewable energy sources, with significant investment required this decade. The technologies for this “massive expansion of clean energy” already exist, the IEA noted, but significant innovation will be needed for power grids to meet any additional demand.

In Ontario, for example, electric cars, trucks, buses and other electricity-powered transportation will increase electricity needs by 20 percent per year over the next two decades, according to a 2021 forecast published by the Independent Electricity System Operator (IESO). Transport is by far the biggest driver of growth, requiring the equivalent of four additional Bruce Power nuclear reactors.

“The electrification of everything will place increasing demands on the power grid,” said Claudio Canizares, Hydro One Research Chair and Executive Director of the Waterloo Institute for Sustainable Energy. The general consensus among energy viewers is that between now and 2050 we need to double or triple the size of our electricity system. However, local networks are not ready yet.

That means provincial energy officials will have to make tough political choices about the types of electric generation they want to bring online — whether that be small modular nuclear reactors, such as the units being developed in four provinces, or more decentralized investments in distributed energy resources, such as the system installed in Parry Sound.

Public interest in established and increasingly affordable DER solutions is growing, says KPMG’s Cameron, adding that large organizations have been active in combining rooftop solar with other technologies. For example, the Toronto Transit Commission (TTC), which is working with OPG’s PowerON and Toronto Hydro, plans to co-invest in on-site generation (such as solar energy) and battery storage in TTC’s bus garages to support the on- site EV chargers for the agency’s growing electric bus fleet.

The scalability of such solutions is enormous, given the abundance of flat roofs combined with the electricity needs of commercial, industrial and institutional users. Over the past decade, the cost of solar energy has fallen by more than 80 percent, and as electric car ownership grows, industry watchers predict that a growing number of homeowners will be interested in installing their panels.

The DER Innovation Pipeline

The push for more clean electricity is fueling growth in the innovation space as companies develop a suite of solutions that can enable and scale projects like Parry Sound’s microgrid. “There are a lot of dreams about what could come next,” says Cameron.

The network of companies and investors flocking to this field is developing three categories of technologies: those aimed at reducing the pressure on existing networks; systems that tap into new renewable energy sources; and platforms that integrate hardware and software to build microgrids.

For example, BrainBox AI has created an AI-powered platform that uses wireless sensors deployed in large commercial buildings to optimize electricity consumption. “Your building is already a battery,” says CEO Sam Ramadori. “You put energy into it.” The company says its customers can reduce their electricity costs by 25 to 29 percent by installing just its AI-based software — an efficiency gain that at the same time reduces pressure on major cities’ grids.

Ramadori points out that in cities like New York and Boston, the demand for such technologies is fueled by local regulations imposing improvements in energy efficiency in large buildings. “Of course, this kind of regulation creates a lot of momentum,” he says. “We are currently in a measurement phase. I see a lot of focus on the tools we need to measure improvements so we can track where we need to focus.”

Microgrid solutions, such as those in Parry Sound, Ontario, are also becoming commercially viable, especially in jurisdictions where prices are high during peak periods. A market study released last fall by the International Microgrid Association estimates that the global microgrid sector will be worth $33 billion in five years, more than double the size of 2020.

However, the innovation pipeline also includes technologies still under development, such as vehicle-to-grid charging, which allow building owners to draw on energy stored in the batteries of parked EVs during expensive periods. For example, Peak Power has commercialized its load-shifting system that allows commercial landlords to save hundreds of thousands of dollars a year with on-site battery storage. But the company is also testing a vehicle-to-grid offering with Toronto developer Dream Unlimited — a service that may allow individual EV owners to sell power from their batteries to the buildings where they’ve parked their cars.

Others want to recycle waste energy as another way to replenish local grids. Extract Energy CEO Ibraheem Khan has developed a “heat engine” using a specialized alloy that can convert low-temperature waste heat from industrial processes into electricity.

Low-grade waste heat represents a huge untapped resource — as much as 65 percent of all generated energy goes up the chimney, Khan says. Extract’s technology, he adds, is also “shipable,” meaning it can be turned on or off, a critical element in low-carbon grids that must rely on intermittent energy from renewables, such as wind and solar, as well as baseload. supply of nuclear and hydropower intended to flow at constant speeds.

While Extract’s process is still in its pre-commercialization stage — the company piloted at Calgary’s Last Spike Brewery in 2020 — the company is attracting investor attention and will launch a $20 million seed round later this year.

As the market share of EVs is set to rise sharply over the next decade, utilities will need to leverage all of these solutions to ensure we don’t have to rely on burning gas or coal to enable fossil fuel-free mobility. “The pressure on the net will quickly mount,” says BrainBox’s Ramadori. “We didn’t realize we were in an overtaking zone.”

Leave a Comment