Grid Innovation Fund - Distributed Energy Resource (DER) Integration Joint Targeted Call

One of the most significant changes to the electricity system in Ontario and around the world has been the rapid expansion of distributed energy resources (DERs). DERs are electricity-producing resources or controllable loads that are connected to a local distribution system or connected to a host facility within the local distribution system and can include resources such as solar panels, combined heat and power plants, electricity storage, small natural gas-fuelled generators, electric vehicles and controllable loads, such as HVAC systems and electric water heaters. DER aggregations (DERAs) bundle DERs to engage as a single entity in electricity markets or as service providers.

 

In Ontario today, at least 5,000 MW of DERs have already been deployed and there is potential for substantial growth driven by decreasing technology costs and increasing capability of DERs, electrification/ decarbonisation goals and federal funding, business environmental, social, and governance (ESG) goals, and municipalities’ community energy planning and customers’ preferences. 1,000 MW of expiring DER contracts (between asset owners and the IESO) are expected over the next decade with additional DERs being installed by residential, commercial and industrial customers independently of distribution or bulk system needs. DERs and DERAs are considered flexible assets that may be leveraged to provide services at both the wholesale market level and distribution system level. Because DERs are often installed for reasons other than distribution or bulk system needs (e.g. building automation, customer reliability preferences) a significant portion of the capital cost of these assets may be paid for by the asset owners – reducing the costs that must be recovered from ratepayers when these assets are enabled in electricity markets. Although these resources have the ability to provide value to the distribution and bulk systems, there is uncertainty around how to unlock that value and the technical and operational requirements to fully integrate DERs across wholesale market and distribution levels.

 

The IESO and OEB are issuing a joint targeted call (‘joint call’) for innovative projects focused on deriving value from DERs, to be funded through the Grid Innovation Fund (GIF) and supported by the OEB Innovation Sandbox (Sandbox). The joint call is interested in applications for projects that leverage DERs and associated technologies to provide services at both the wholesale market level and on the distribution system. Please note that references to DERs in this document refer to DERAs as well.

 

The IESO and OEB will accept for consideration applications submitted between November 1,