- SolarBank submitted proposals for projects across Ontario utilizing Lithium Iron Phosphate technology
- If awarded, SolarBank will advance each project through permitting, engineering, procurement, construction, and commercial operation
- Awarded contracts are expected to operate under a 22-year contract with additional revenue earned from Ontario’s energy and ancillary markets
Toronto, Ontario, June 20, 2023 — SolarBank Corporation (CSE: SUNN; OTC: SUUNF; FSE: GY2) (“SolarBank” or the “Company”) is pleased to announce the submission of revised pricing for three separate proposals, following submission of the full proposals in early 2023, to the Independent Electricity System Operator’s (“IESO”) Expedited Long-Term 1 (“E-LT1”) Reliability Procurement in Ontario. The proposed projects are owned by Solar Flow-Through Funds and two First Nations communities in Ontario (the “Investors”). The proposals represent SolarBank’s initial foray into battery energy storage, a market forecast by Fortune Business Insights to grow at a 16.3% compound annual growth rate from 2022 to reach US$31.2 billion by 2029.1
SolarBank successfully obtained resolutions of support from local municipal councils for each project and will act as the project developer and engineer on behalf of the Investors. Should the projects be awarded, SolarBank will advance each project through permitting, engineering, procurement, construction, and commercial operation.
“We have extensive experience working with Ontario’s IESO and are very pleased to be interacting with them again as they remain proactive in energy reliability,” said Dr. Richard Lu, Chief Executive Officer at SolarBank. “As a market leading proponent of the IESO’s Feed-In-Tariff program, we secured multiple 20-year contracts for small-scale solar photovoltaic projects throughout the province, projects that continue to produce clean energy today. Now, as we aim to make our entrance into the battery energy storage markets, we are fortunate to have the opportunity to work with Solar Flow-Through Funds, First Nations, and, once again, the IESO to further galvanize the future of our company.”
The IESO works at the heart of Ontario’s power system, delivering key services across the electricity sector, including managing the power system in real-time, planning for the province’s future energy needs, enabling conservation, and designing a more efficient electricity marketplace to support sector evolution.
Addressing the province’s projected grid reliability needs, the IESO is competitively securing capacity through an expedited procurement process. E-LT1 initial procurement capacity is slated at 1800 megawatts (“MW”). The IESO plans to launch a 2200 MW LT1 procurement later in 2023 and an LT2 procurement after LT1.
Transmission and distribution-connected battery storage projects provide reliability benefits to existing electricity grids. In what is known as energy arbitrage, the storage systems will discharge their capacity during periods of peak demand and high prices and then re-charge from the grid when demand and prices are low. Utilities and system operators pay for these benefits to the grid via capacity payments.
Contracts for the E-LT1 procurement require projects to be operational between May 2025 and May 2026. Each system is expected to operate under a 22-year contract with guaranteed capacity payments from the IESO, provided all contract obligations are met. The systems will also earn revenue from the energy and ancillary markets in Ontario.
The projects in SolarBank’s submissions are in three different areas of Ontario. Each has a 4.99 MW discharge capacity with a four-hour duration using lithium-iron-phosphate technology. Lithium Iron Phosphate technology allows for the greatest number of charge/discharge cycles, making it the optimal selection for stationary energy storage systems.
There are several risks associated with the proposals set forth in this news release. Firstly, there is no certainty that the Company’s proposals will be accepted as submitted or at all. If the proposals are not accepted the Company will not proceed with these projects, will not recover any costs expended in advancing the proposals and will not generate any related revenue or profits from operations. If the proposals are accepted there remain risks related to the construction of the projects and their ultimate successful operation. There is not certainty the projects will be completed on schedule or that they will operate in accordance with their design capacity. The development of any project is subject to receipt of required permits and the continued availability of third-party financing arrangements for the Company. In addition, governments may revise, reduce or eliminate incentives and policy support schemes for battery storage systems, which could result in future projects no longer being economic. Please refer to “Forward-Looking Statements” for additional discussion of the assumptions and risk factors associated with the statements in this press release.
1 https://www.fortunebusinessinsights.com/industry-reports/battery-energy-storage-market-100489