An army of backup power generators sits idle on thousands of building rooftops and commercial properties across the province – enough hidden power generation to displace two or three coal plants.
It’s a reserve army rarely called into service, springing into action only when massive blackouts hit or lightning plays havoc with local power lines.
But a new program introduced by the Ontario Power Authority, called Demand Response 3 (DR3), could call those generators into service during the 1,600 hours a year when the province needs them most – when the dirtiest of power plants are typically fired up or when coal-fired electricity is imported from the United States.
“There are in the area of 2,000 megawatts of these generators available across the province, a lot of that within downtown Toronto,” said Robert Desnoyers, co-founder and vice-president at Mississauga-based Safety Power Inc.
“We’ve got those generating assets sitting out there strategically, and they’re located exactly where this province needs them most.”
Currently there are eight companies, called “aggregators,” that have applied to participate in the DR3 program. An aggregator signs up as many owners of backup generators as it can, then strikes a single contract with the power authority guaranteeing that, when asked, a certain amount of backup power generation can be switched on.
The power authority is willing to pay an attractive price for that predictability. The owner of a one-megawatt generator could earn tens of thousands of dollars by participating, though the aggregator will take a cut. Aggregators that have registered so far include Direct Energy, Rodan Energy and EnerNoc. It’s expected that a new Enbridge-Toronto Hydro venture will also sign up.
But participation comes with a hitch. The Ministry of Environment proposed a new regulation last month that would allow the non-emergency use of backup generators, but only if they complied with strict emission guidelines.
“These limits will assure that emissions from generator sets are similar to those from natural gas combustion turbines,” according to the policy document.
Consultation on the proposal ends March 1.
The problem is that most backup generators run on diesel fuel, so the environmental gains of calling one dirty fuel into service to replace another is questionable.
Safety Power and its rivals, including Mississauga-based Gal Power Systems, sees huge opportunity in retrofitting old diesel generators with emission-control technologies, the cost of which will be covered through the DR3 program.
“We maintain that with some technology added to the generators we can demonstrate a diesel generator could meet or exceed emissions criteria,” said Desnoyers, explaining that the equipment used is a type of catalytic reduction device.
“Because the revenue stream is as good as guaranteed revenue from the power authority, getting the capital for these upgrades is not going to be a challenge.”
Over time, it’s hoped that diesel generators will be replaced with more efficient, cleaner natural gas generators. If enough of these machines can be called into action when needed, some argue it could delay the need to build a new natural gas plant in Toronto.
“The concept is very important,” said energy consultant Marion Fraser, president of Fraser & Co. “In 2007, there were 62 hours where we exceeded 24,000 megawatts in the province.”
She said it makes more sense to use an existing fleet of backup generators than to build one or two natural gas plants to handle peak periods. “It’s not the only answer. But it’s an important component (along with conservation) of the demand-side resources that we need to harvest.”
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