Energy Storage: The Regulatory Landscape in Alberta

Abstract

Energy storage technologies are increasingly being deployed in Alberta. In the recent past, costs were the largest hurdle to widespread energy storage deployment. But this is changing given falling battery prices. Indeed, the Alberta Electric System Operator (AESO) and the Alberta Utilities Commission (AUC) processes are increasingly considering energy storage development and potential but within the scope of existing legislation and its policy framework. Alberta’s traditional model of electricity regulation is based on generators supplying electricity to load customers for consumption and does not directly contemplate the unique attributes of energy storage. These attributes include the flexibility of customers to switch between supply and load, such as where a customer discharges a battery into the grid during peak hours and charges the battery during off-peak hours.

Energy market participants and policy-makers need to consider the use of flexible resources in an evolving electricity industry where distributed and intermittent power sources are increasingly prominent. Energy storage is playing a key role in this ongoing evolution. To that end, this article seeks to provide practitioners and industry stakeholders guidance on the current state of the Alberta regulatory landscape applicable to energy storage and anticipated changes.

Specifically, this article sets out the regulatory framework applicable to, and policy issues raised by, energy storage, including tariffs and competitive market issues, the concept of “hybrid sites” and self-supply and export issues, and AUC decisions approving the deployment of energy storage. As to how the landscape may change, this article looks at recent policy statements by the AUC and the AESO describing potential changes on the horizon.