GROWERS HELPING ONTARIO MEET SHORT-TERM POWER DEMANDS
By Dave Harrison
A Leamington-based company is coordinating a unique energy program involving standby generators. It’s a win-win situation. “We take small scale standby generation from the participating greenhouses, aggregate them together, and sell this power as a block to the grid.”
Few people question where the power originates when they flip a light switch or plug in a toaster.
It’s usually a nuclear or coal-fired generating station, or possibly the Sir Adam Beck complex capturing the water-power of Niagara Falls.
Or, since December 2005, the source on a number of occasions could also have been a standby greenhouse generator in Leamington/Kingsville.
To understand how a group of greenhouse growers are playing a role – albeit a rather modest one – in Ontario’s wholesale electricity market, we talked with Cole Cacciavillani, president of Leamington-based GenSet Resource Management, general manager of CF Industrial, and secretary-treasurer of CF
And for the project’s roots, we have to go back to the province-wide blackout in August 2003.
Leamington’s mayor back then, Dave Wilkinson, contacted Cacciavillani as part of local contingency planning. The mayor knew CF Industrial was a leading industry supplier, and he wanted to know the capacity of the region’s greenhouse standby generators.
For five days during the blackout, those generators were able to meet the needs of growers, thereby reducing the overall demand to the provincial grid. Power was slowly being restored across the province, and alleviating loads during peak demand periods was important. Because its an integrated system across the province, “if we take less here, there’s more power for others across the grid,” said Cacciavillani.
The greenhouse standby generators proved their considerable electricity generation capabilities. And it got people thinking, Cacciavillani included, given deregulation of the wholesale electricity market. Also impressed with the potential was Ray Tracey, president and CEO of Essex Power, along with representatives of the Independent Electricity System Operators.
GenSet soon began working with Essex Power and the IESO to develop their program. GenSet is currently the only licensed aggregator in Ontario. “We take small scale standby generation from the participating greenhouse,” explained Cacciavillani, “aggregate them together, and sell this power as a block to the grid.”
For their part, growers pay for the retrofitting of their generators, a significant investment; however, the payback period is estimated to be about three years.
CF Industrial provides the local support. It handles the onsite retrofitting to allow the generators to export power to the grid. It maintains and fuels the units. It also remotely controls and monitors each generator to ensure it’s ready to respond when needed.
Essex Energy (a subsidiary of Essex Power) has the responsibility of developing the bid and maximizing supply strategies. (It sometimes makes better sense to generate less, but at a higher price.) It also has the necessary market interface tools with the IESO to handle the transactions of power to the grid, and payments to the suppliers.
There are times during the day, for intervals lasting only a few minutes, when energy demands from traditional generating sources fall short. The province doesn’t want to risk brown-outs or power interruptions, so through the IESO, instantly generated and short-term power is accessed from sources such as GenSet.
“We’re not the cheapest power available to them, but we’re important to them (IESO) in keeping the grid up and running.”
The IESO is constantly monitoring and anticipating demand loads. When they see a spike coming, they will alert the major power sources, such as a nuclear or coal-fired generating station, to respond accordingly. However, those units will take some time to ramp up to meet the demand, and until they’re ready, the short-term suppliers – like GenSet – are brought on line, if only for a few minutes.
GenSet is one of dozens of small suppliers that can respond. Each has registered their price bid with the IESO, and the agency will begin accessing the cheapest power as it moves up the queue to fulfill the demand. “They may not need our power because the demand has been met by cheaper sources.”
GenSet is always ready. “You never know when it’s going to happen,” said Cacciavillani. “When the market hits that preset price, we’re generating.”
The beauty of the program for growers is that standby generators must be run periodically to ensure they’re working fine. In this case, they’re a necessary expense. But if that same generator is involved with the GenSet program, it’s now moved to the revenue side of the balance sheet.
There are actually two sources of revenue. The participants will, of course, be paid for electricity generated. However, there are other times when the IESO needs to place a supplier on standby, and the program also pays for this.
GenSet currently has six generators retrofitted and connected to the grid, totalling some 3.1 megawatts. Another eight units are in the process of being retrofitted and assessed by regulatory officials.
GenSet has been approved for up to 10 megawatts. “We can grow bigger,” said Cacciavillani, “but there are different criteria.”
This hasn’t been a hard sell to growers, he said. “They saw the potential, and the equipment is there anyway. They know the payback period.”
The program is getting a lot of attention, and the model could be applied anywhere. “We are a pilot project. No one else is doing what we’re doing.”