Ontario — Toronto-based SolarBank Corporation has secured approval from the Ontario Independent Electricity System Operator (IESO) for three separate battery storage proposals.

This marks the company’s first step into the battery energy storage sector.

SolarBank, together with its investors, the Solar Flow-Through Funds and two Ontario First Nations communities, won the IESO’s Expedited Long-Term 1 (E-LT1) Reliability Procurement process.

The company says it has garnered local municipal support for each project and has met the requirements set out in the IESO’s E-LT1 Procurement Request for Proposal.

That the projects will proceed to the development and construction stage, assuming successful completion and execution of the E-LT1 Contract and associated closing documents. SolarBank and the investors are deliberating over the company’s potential future role in the projects, which might encompass overseeing permitting, engineering, procurement, construction, and commercial operation.

The IESO, a vital component of Ontario’s power system, offers critical services across the electricity sector, including real-time power system management, future energy needs planning, conservation promotion, and the design of an efficient electricity marketplace.

The awarded projects, connected to transmission and distribution networks, will contribute to the existing grid’s reliability.

They will utilize energy arbitrage, discharging capacity during peak demand and high prices and recharging when demand and prices are low. These grid benefits are typically remunerated via capacity payments by utilities and system operators.

The projects, which are anticipated to be operational by April 30, 2026, will each have a 22-year contract with the IESO, which guarantees capacity payments, given all contract obligations are met. They will also generate revenue from Ontario’s energy and ancillary markets.

Located in three distinct Ontario regions, the projects feature a 4.99 MW discharge capacity with a four-hour duration, using lithium-iron-phosphate technology, renowned for offering the highest number of charge/discharge cycles, thus making it the optimal choice for stationary energy storage systems.

However, several risks are inherent to the proposals.

Notably, there is no guarantee that the investors will successfully execute the E-LT1 Contract and related closing documents. Additionally, terms for SolarBank’s ongoing involvement with the projects are yet to be agreed upon.

Project completion timelines and operation in line with their design capacity are also uncertain.

Potential risks include necessary permit acquisition, continued availability of third-party financing, and the possibility of future policy changes reducing or eliminating incentives for battery storage systems, thereby affecting project economics.

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