Three projects in Ontario, each has a discharge capacity of 4.74 megawatts with 18.96 megawatt hours of storage
SolarBank currently manages solar farms at two of the three locations
that will now host a Battery Energy Storage System (BESS)
SolarBank Corporation is ?pleased to announce that further to its press release of June 28, 2023, it has now entered into engineering, procurement, and construction (“EPC”) agreements dated October 3, 2023 for the construction of three separate BESS projects (the “Projects”) with a total contract value of approximately $36 million. The Projects are owned by Solar Flow-Through Funds, two First Nations communities, and a third party developer in Ontario (the “Investors”). The battery energy storage market is forecast by Fortune Business Insights to grow at a 16.3% compound annual growth rate from 2022 to reach US$31.2 billion by 2029.1
Transmission and distribution-connected battery storage projects provide reliability benefits to existing electricity grids. In what is known as energy arbitrage, the storage systems will discharge their capacity during periods of peak demand and high prices and then re-charge from the grid when demand and prices are low. Utilities and system operators pay for these benefits to the grid via capacity payments.
The Projects were awarded as part of a procurement process with the Ontario Independent Electricity System Operator (“IESO”) known as “E-LT1”. Projects under the E-LT1 are expected to be operational no later than April 30, 2026, but the Company intends to have them completed for operation by the summer of 2025. Each Project is expected to operate under a long term contract with guaranteed capacity payments from the IESO, provided all contract obligations are met. The Projects will also earn revenue from the energy and ancillary markets in Ontario.
The Projects are in three different areas of Ontario. Each has a 4.74 MW discharge capacity with a four-hour duration using lithium-iron-phosphate technology. Lithium-iron-phosphate technology allows for the greatest number of charge/discharge cycles, making it the optimal selection for stationary energy storage systems.
There are several risks associated with the Projects set forth in this news release. Firstly, there is no certainty the Projects will be completed on schedule or that they will operate in accordance with their design capacity. If the EPC agreements are terminated then SolarBank will not realize the full contract value. The development of any Project is subject to receipt of required permits and the continued availability of third-party financing arrangements for the Investors. In addition, governments may revise, reduce or eliminate incentives and policy support schemes for battery storage systems, which could result in future projects no longer being economic.