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Vodka from CO2? Feasible. Energy storage? Fantasy. Danielle Smith’s hot-and-cold views on technology

Credit where it’s due: It took guts for Danielle Smith to come and speak in front of the crowd at the Pembina Institute’s Alberta Climate Summit in Calgary last week.

The event host, Dave Kelly, acknowledged as much in introducing the premier to the progressive-leaning crowd: “You couldn’t have dragged your predecessor [Jason Kenney] here in his pickup truck. Why are you here?”

Smith told Kelly she genuinely enjoys talking about energy, emissions and the environment, and she certainly had a lot to say on those topics, particular as they relate to new technologies.

On stage, the premier spoke in glowing terms about the potential for high-tech solutions to meet Alberta’s energy needs while reducing its greenhouse gas emissions. She effused about hydrogen cars, geothermal power, small modular nuclear reactors and even direct-air carbon capture for the production of consumer goods such as vodka and M&M candies. (Seriously.)

“It’s incremental changes on incremental technology that add up to a major reduction in emissions,” the premier said.

At the same time, Smith threw cold water all over another technology: energy storage.

She described industrial-scale batteries as prohibitively expensive (despite the fact that seven such facilities are already connected to the grid) and said it was “fantasy thinking” to believe storage could be coupled with renewable energy to meet the province’s power demands.

Smith’s critics (and there were many in the room that day) were baffled by the premier’s hot-and-cold perspectives on technological solutions. Her disdain for energy storage, in particular, irked some in attendance, who say the premier is getting some basic facts wrong about a technology that already makes up a small — but growing — component of Alberta’s electricity grid and has seen rapid expansion in other jurisdictions.

There’s a lot to unpack in what Smith said about storage. Let’s take it bit by bit.

Impromptu exchange with audience member

Smith outlined her view of energy storage in an impromptu exchange with an audience member at the climate summit.

In a back-and-forth that arose spontaneously, the premier dismissed the idea of renewable energy coupled with industrial-scale batteries to sustain the province’s electricity grid, which sees a peak demand of roughly 12,000 megawatts (MW).

“I’ll tell you what I know about batteries because I talked to somebody who was thinking of investing in it, on a 200-MW plant: $1 million to be able to get each megawatt,” she said.

“That’s $200 million for his plant alone. And he would get one hour of storage. So if you want me to have 12,000 megawatts of storage, that’s $12 billion for one hour of storage, $24 billion for two hours of storage, $36 billion for three hours of storage.”

Climate crowd reacts to Alberta premier’s skepticism about net-zero timelines

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Duration 2:11

Featured VideoDanielle Smith had a tough time convincing attendees of the 2023 Climate Summit in Calgary that moving to net-zero grid by 2035 would be an impossible task.

“That is the reason why we need legitimate, real solutions that rely on base-load power rather than fantasy thinking,” Smith concluded. “And I am not going to engage in fantasy thinking.”

Smith’s critics point out a rhetorical sleight-of-hand here. When talking about other, early-stage technologies that she tends to favour, “incremental changes” are to be applauded. But when it comes to energy storage, she switches to an all-or-nothing scenario, talking about how unrealistic it would be for batteries to suddenly meet the entire electricity demands of the province, single-handedly, for hours at a time.

Robert Tremblay, policy manager with Energy Storage Canada, says no one is realistically imagining such a scenario — at least, not anytime soon.

“I don’t want to say that our vision isn’t that storage plays a role that big,” he says. “But, I mean, that’s a long, long ways away.”

For now, he says, the industry has already demonstrated that energy storage is no fantasy.

Energy storage already is part of the grid

CBC News reported in August about the existing energy-storage industry in Alberta, and how some proposals for new storage projects were caught up in the province’s renewable-energy moratorium, because they were attached to wind or solar generation. 

At that time, there were five small battery-storage facilities totalling 90 megawatts of capacity connected to the province’s power grid.

Since then, that has grown to seven facilities totalling 130 megawatts.

A Tesla-branded bank of batteries in the foreground, a giant wind turbine in the background.
TransAlta’s WindCharger project was the first utility-scale lithium-ion battery storage facility in Alberta. It began commercial operation in 2020. (Kyle Bakx/CBC)

Of course, that’s still a drop in the bucket compared to Alberta’s electricity needs, but the pace of growth is encouraging to many in the industry. The unnamed investor Smith referenced may not have thought energy storage was worth putting money into, but others see more promise in the sector.

Before the renewables pause was announced, there were dozens of active entries on AESO’s list of energy-storage proposals, representing thousands of megawatts of proposed capacity. Not all of those projects were expected to actually be built, but the interest in the sector is hard to deny.

In the United States, energy storage had already been seeing rapid growth that was only accelerated by federal investments under the Inflation Reduction Act.

In particular, a tax credit for standalone battery facilities “led to an explosion in demand from developers to proceed with projects,” according to an analysis published by the U.K.-based Energy Institute, a professional membership organization with an energy-transition mandate.

A big part of the recent growth has been the declining cost of industrial-scale batteries.

How much per megawatt?

Declining costs were a big driver for Enfinite, the company behind most of the standalone battery-storage on Alberta’s power grid, in its decision to invest in the relatively small 20-MW facilities it currently operates.

The company is also looking to invest in much larger projects, including a 400-MW battery storage facility near High River and a 500-MW facility near Medicine Hat.

“We’re getting a lot more comfortable with all the opportunities that energy storage can play in the market and I think that we’re a lot more comfortable with the overall technology,” Enfinite CEO Jason White told CBC News in August. 

“We think now is the right time for those bigger projects.”

An small industrial facility in a rural field, with a setting sun behind it.
Enfinite’s eReserve1 facility near Rycroft, Alta. The 20-MW facility was the company’s first energy-storage project connected to Alberta’s electricity grid in late 2020. It has continued to add new projects since. (Submitted by Enfinite)

The price Smith quoted from her unnamed investor friend — $1 million per megawatt for a one-hour battery — is also higher than what Tremblay says is the actual cost these days.

“It’s probably high by about double,” he said. “That’s more the cost for what we think of as a two-hour battery.”

That’s not out of line with the average costs of other types of power facilities, he said, although construction costs can vary greatly from project to project and region to region.

It’s also hard to directly compare, say, a natural-gas generation plant or a solar farm with an energy-storage facility, as they are fundamentally different technologies that offer different benefits to a power grid. 

Reserve power and ancillary services

If you look at the Alberta Electric System Operator’s supply and demand data, you’ll see output from energy-storage facilities typically listed under “dispatched contingency reserve.”

This reserve is necessary because of the size and complexity of the system and the fact that it takes time for some generating stations to adjust their supply to meet sudden changes in demand.

“Regulating reserves instantaneously provide the power difference between supply and demand required during that lag period,” the operator explains on its website.

Tremblay says batteries are exceptionally well suited to this purpose because they can “respond very quickly” to supply and demand changes, soaking up or pumping out power as necessary. They can also help ensure the proper voltage and frequency of electricity is maintained.

These types of “ancillary services” are a primary role for battery storage already, both in Alberta and around the world, although energy “arbitrage” — providing raw grid power, at a profit — is also a major application in the United States.

And while batteries get a lot of the headlines, they are not the only way of storing energy.

Pumped hydro is a method for storing energy that has been employed in other countries, and several companies are currently pursuing projects in Alberta.

This technology uses cheap power during low-demand periods to move water from a lower reservoir to a higher-altitude reservoir. Then, when energy demand is high, the water is released back to the lower reservoir, spinning hydroelectric turbines along the way.

TC Energy’s Canyon Creek Pumped Hydro Energy Storage Project near Hinton will add 75 MW of “on-demand, flexible, clean energy” to the province’s grid once complete, the company says.

An aerial view of a mountain top
An aerial view of Tent Mountain in southwestern Alberta, which was the site of an open-pit coal mine that was active decades ago but has since been abandoned. An Australian company and TransAlta have partnered to use the site for a pumped-hydro energy storage project. (Montem Resources)

TransAlta recently purchased a 50-per-cent stake in a similar project, partnering with a former Australian coal company with the goal to transform an old, open-pit mine on Tent Mountain near Crowsnest Pass into a pumped-hydro facility.

Even if all of these projects end up coming to fruition, of course, they still won’t add up to 12,000 megawatts anytime soon.

That may diminish the idea of energy storage in Smith’s mind, but others believe energy storage still has great potential even if it’s not a panacea for the province’s energy challenges.

‘All of the above’

Asked how he sees Alberta going from its current generation mix — dominated by natural gas — to the net-zero future his government envisions, federal Energy Minister Jonathan Wilkinson said no single technology can provide the answer.

“It’s going to be an ‘all of the above’ thing,” he said.

“Some of it is renewables, and Alberta has had the fastest renewable growth of any province in the country. But certainly coupled with that is storage — large scale storage — to be able to actually balance some of the intermittencies.”

Wilkinson also expressed optimism for some of the same technologies as Smith, including natural gas coupled with carbon capture and storage, as well as small modular reactors.

Federal Energy and Natural Resources Minister Jonathan Wilkinson speaks to reporters at the Pembina Institute's 2023 Alberta Climate Summit.
Federal Energy and Natural Resources Minister Jonathan Wilkinson speaks to reporters at the Pembina Institute’s 2023 Alberta Climate Summit. (Mike Symington/CBC)

He didn’t mention anything about vodka or candy, but it should be noted that the examples the premier highlighted are real: captured CO2 has been used to make ethanol and produce vodka, as well as to grow spirulina, a type of algae used as food colouring.

Alberta NDP Leader Rachel Notley, for her part, didn’t have anything against those technologies but questioned why Smith seemed to talk them up in one breath while talking down energy storage in another.

“What she’s doing is she’s picking and choosing winners, based on sort of weird ideological hang-ups,” Notley said.

“I think there is something to be said for for letting the market drive the decisions that will be taken with respect to the most effective, efficient, affordable way to reduce our emissions and to produce electricity.”

Tremblay, with Energy Storage Canada, says a suite of technologies hold promise for helping meet the low-emission energy needs of the future. In his view, battery storage is far from a “fantasy” and will likely be a big part of that future, although he admits he’s obviously biased toward the sector that employs him.

“But I’m happy for our sector to put the money where our mouth is,” he said.

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