The contract, which was awarded earlier this year, will require Enbala to deliver 4 megawatts of frequency regulation for Ontario's Independent Electricity System Operator (IESO). The platform, GOFlex, will be able to respond within seconds to signals from the grid to adjust load at various commercial and industrial sites such as cold storage warehouses, wastewater treatment plants, large office buildings and factories.
Enbala’s best-known project is in PJM, where it has been providing frequency regulation services for about two years by aggregating quick-responding load from about twenty sites. In Ontario, Enbala will start with just a few sites, according to CEO Ron Dizy, and then build from there. Enbala has approximately 50 load sites currently under contract.
The time and cost of onboarding each customer will likely fall in the future. Today, engineers need to assess each site for its capability and then devise a plan for what the owner is willing to shed. With the addition of more customers, the process should become more standardized -- up to a point. “Every single water plant is different,” observed Dizy. Many clients have been interested in frequency regulation in addition to or in place of traditional capacity demand response, because regulation might be needed for fifteen minutes, rather than for multiple hours at a time.
“The challenge is, will it be available exactly when I want it?” Dizy said of demand resources for frequency regulation, which require a much faster response than traditional capacity demand response markets. “But that’s an IT problem, not an electricity problem.” The GOFlex platform took in about 8 million grid signals last year.
Every utility and regional grid operator needs grid balancing assets, which primarily have come from generation sources. But with increased amounts of intermittent renewables, many grid operators are looking for balancing from new (and potentially cheaper) sources. In Ontario, the grid operator has to sometimes curtail its nuclear generation to fire up gas generators to use for balancing.
While Enbala is happy to be working with PJM and IESO, Dizy said that the company is also focusing on vertically integrated utilities. He noted that a 3 percent efficiency savings from running a generation resource more efficiently for a utility like BC Hydro could cut costs by $80 million to $100 million per year.
Enbala is in deep discussions with TVA and another large, vertically integrated utility in North America. “When you go live with it, you see results pretty quickly,” Dizy told journalists during a media tour in Ontario. He added that the utilities Enbala is working with were seeing paybacks in less than a year, which is not something utilities often see in their investments.
New Brunswick Power, which has nearly a quarter of its generation capacity from wind power, wanted to more cost-effectively balance its wind resources. New Brunswick was using an oil plant for backup, and in about one year has avoided about 300 starts of the oil generator while also cutting down on idling time. “What the demand side does is it let people buy flexibility outside of capacity,” he said. Enbala is also working with Nova Scotia Power for wind balancing.
Dizy said the Toronto-based company had its hands full with North America in 2013, but it is also eyeing international expansion, especially into the U.K. or Italy.
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