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Regulatory uncertainty slowing development of 'hybrid' power plants

Regulations that are unclear on how to classify electricity storage or how to smoothly connect power supply from multiple sources within a single plant are slowing the development of so-called hybrid projects in Canada, a panel of industry experts said.

Co-location of multiple generation types or combinations of storage and power production are still novel concepts in the regulatory realm, and participants are still trying to define and set costs for each type of service or the combination of both. The Oct. 10 panel discussion was part of the Canadian Wind Energy Association's Calgary conference. The panelists agreed that while most regulators and utility customers find the concept of hybrid power plants appealing, there is little consensus on how they should be developed.

"We still have a lot of challenges in Canada, including equipment costs which are improving — steadily getting lower — but they're still high," said Adam Sirignano, senior commercial manager for wind turbine manufacturer ENERCON Canada Inc. "There's definitely a lack of interest and incentives from government in adopting these hybrid projects, including legislation to allow them to be more successfully deployed."

Creating complex facilities that can produce power, charge batteries and discharge electricity to the grid as a single service is a popular idea because those plants can help smooth output that can be interrupted by weather conditions. While the concept is appealing, the reality is that some aspects of the process, such as generation and storage, are being regulated separately, and the costs are higher than simple generation. Aaron Atchison, a lawyer and a partner specializing in renewables development for Miller Thompson LLP, said most jurisdictions are barely ready for the addition of storage to the energy mix.

"Everybody says that they're for storage, and generally they're for hybrid projects like generation and storage," Atchison said. "You would be hard pressed to find a political stripe that says that adding storage is a bad idea. But we're not ready, and we're sifting through regulations trying to understand how it applies accidentally."

Southern Alberta's Blackspring Ridge wind facility, a venture of EDF Renewable Services Canada Inc., Enbridge Inc. and the Canada Pension Plan Investment Board, is an example of a facility being considered for hybrid operation. A solar project is being planned as an adjunct to the 300-MW wind farm, which generates most of its power at night, said EDF Canada Development Manager Dave Warner. The 77.5-MW Vulcan Solar Project would allow both sources to tap into transformer capacity at the site's substation and provide continuous production. EDF Canada is an affiliate of Electricité de France SA.

"What this is doing is utilizing existing incremental capacity in the main power transformer at the site," Warner said. "What the solar project allows us to benefit from is no new infrastructure on the substation side while delivering essentially as much solar production as possible when the wind facility is likely to not be producing."

The value of the service that hybrid projects can provide to grid operators is not being valued enough, Sirignano said.

"The biggest hurdle to the implementation really is policy and market valuation of the services these hybrid projects bring to the table," Sirignano said. "If we want to see a 100% renewable grid, with diverse sources of electricity, we will need to acknowledge the flexibility that's provided by these systems."