The Ontario Energy Association and Energy Storage Canada have pitched a policy and regulatory framework to facilitate the adoption of widespread distributed energy resources (DERs) in Ontario.
The “From Small to Mighty: Unlocking DER's to Meet Ontario's Electricity Needs” report released on December 12 outlined the framework’s key principles as follows:
- Enabling households and businesses to manage energy costs and join the electricity market through DERs, improving affordability.
- Backing investment in advanced grid technologies to boost efficiency, reliability, and flexibility.
- Championing clean energy solutions to cut greenhouse gas emissions and stimulate economic growth.
- Ensuring equitable payment for DERs' services to the wholesale market, distribution systems, and end-users.
Examples of DERs include rooftop solar panels, battery energy storage systems, and demand-response technologies.
“To most efficiently meet Ontario's future energy needs requires us to modernize our policies, regulatory framework and electricity grid to accommodate and integrate distributed energy resources (DERs),” said OEA president and CEO Vince Brescia in a statement. “The framework put forward today provides one key element of a customer-centric, scalable, and environmentally responsible approach to meeting some of Ontario's growing energy demands.”
Ontario's electricity demand is expected to increase 75 percent by 2050, from 151 TWh in 2025 to 263 TWh.
“Energy storage of all types and durations is going to be critical to meeting the future needs of Ontario's electricity system and this absolutely includes leveraging the value energy storage systems can provide as DERs,” ESC president and CEO Justin Rangooni said. “Ensuring the alignment of procurement and planning to enable DERs, enabling DERs' full participation in Independent Electricity System Operator (IESO) markets and procurements, and modernizing the province's policy and regulatory frameworks will ensure we are utilizing the full range of benefits DERs can provide the grid to increase affordability, flexibility, and reliability in the electricity system.”
As part of a broader framework, the OEA and ESC pitched a complementary procurement stream led by local distribution companies (LDCs), addressing smaller-scale, localized DER projects. LDCs can accelerate DER deployment by leveraging direct customer relationships, grid visibility, and operational experience through this stream.
The framework recommends a three-phase approach outlined as follows:
- Walk: LDC-led procurement and foundational grid modernization investments facilitating instant DER deployment.
- Jog: Increased coordination between LDCs and the IESO to support local flexibility markets and fulfill near-term supply needs.
- Run: Complete DER integration into wholesale and distribution markets, backed by refined market rules and advanced systems.
The OEA and ESC have urged the Ontario government to:
- Permit LDC-led DER procurements by directing policies to the Ontario Energy Board and the IESO.
- Bolster aggregated DER participation by expanding IESO’s annual capacity auction targets.
- Update regulations for DER deployment support, such as limiting interconnection barriers and removing gross load billing for behind-the-meter resources.
- Back the development of LDC-led local flexibility markets efficiently integrating DERs, facilitating cost-effective grid optimization.
The OEA represents energy leaders in Ontario, while ESC is a national trade association focused on energy storage growth and market development.