Energy (Electricity)

Overview
Electrical power work identifies lawyers whose firms can provide a full range of services, including advising market participants on transactional, regulatory and policy matters ranging from the development of energy projects to the management of existing facilities and to all aspects of the restructuring and deregulation of electricity markets.

Alberta Sets Renewable Energy Target
In September 2016, the Alberta government confirmed a target of 30 per cent electricity from renewable sources by 2030. The government also announced that it would support development of 5,000 megawatts of renewable capacity towards this goal.

E-Storage
French oil and gas company Total S.A.’s announcement in early May 2016 that it would spend about $1.1. billion to acquire Saft Groupe S.A. may signal a new era of opportunity in the energy storage market.

Existing technologies are achieving scale, the price is dropping regularly – much more quickly than expected —and new technology is evolving rapidly. It makes sense. One of the primary difficulties with getting renewable energy on a grid is that it is intermittent.

The global market for energy storage technology was estimated to be $24 billion in 2015. In the US alone, a recent study shows that the country’s energy storage market grew by 243 percent during the same period. Meanwhile, a branch of the US Department of Energy says it has attained the “holy grail” of energy by developing a new generation battery storage system that it claims will transform America’s electrical grid.

Throughout Canada, there have been more that 30 grid-scale energy storage projects, either in development or fully operational. The technologies used have included pumped hydro, compressed air energy storage, flywheels, lithium ion batteriess, hydrogen power and gas storage.

According to a Norton Rose Fulbright LLP firm bulletin, the current emergence of the energy storage market is different from the “short lived booms” of the past. “The difference now is that developments are not being led solely by the suppliers, inventors and VC investors but by the buyers and users,” the firm states. “Large utilities and retailers are supporting the roll-out of energy storage devices and governments are looking to kick start the industry in the same way as they fostered solar and wind power generation.”

It’s a global story. Panasonic and GE are developing energy storage projects in India; Sony, Chem and BYD are also in the market; South Korea has successfully deployed the world’s largest lithium energy storage system; and Mitsubishi recently delivered a high-capacity energy storage system to Japan.

In Europe, Engie and SUSI Partner AG, an investment adviser, are providing about $50 million to promote energy storage projects. The UK’s RES has signed a four-year contract with National Grid to provide 20MW of frequency response from battery storage. Danish investor Recharge is the majority stakeholder in a hybrid renewal storage project on the Azorean island of Graciosa in Portugal. “The background context continues to be the diversification into storage by utilities, automobile manufacturers and oil and gas companies,” Norton Rose states.

Another significant development is the application of blockchain technology to the energy storage market.

“A new, fast and computer automated way of undertaking energy transactions, combined with high penetrations of distributed generation and storage technology has the potential to revolutionise power markets,” Norton Rose states.

Things aren’t quite as far along in Canada, where projects are mostly small scale and larger projects still a ways off. But energy lawyers see more and more e-storage companies being formed and financed, and new products being tested with early adopters.

Avalon Battery Corporation, for example, is a two year-old Vancouver-based company that is into its second round of financing. Avalon has two products deployed at US companies who are storing excess power for off-cycle use.

Other leading Canadian companies in the space include Mississauga’s Temporal Power Ltd., which has designed one of the world’s leading flywheel energy storage technologies, and Hydrostor Inc., which has just launched its underwater hydrostatic pressure storage facility near Toronto Island. Otherwise, Ontario has already issued an RFP for energy storage technology, and the province is, along with New York and California, leading regulatory reform in North America.

Indeed, Ontario’s Long Term Energy Plan has the government examining opportunities for net metering and conservation policies to support energy storage. The government has also directed the Ontario Power Authority to include a pricing structure that will allow storage assets to integrate with large renewable projects.

As Total’s acquisition demonstrates, the oil companies will likely be big players in this market. Saft is a French firm that makes batteries for industrial use by telecommunications, railway and aerospace companies. Its purchase is a key part of Total’s plan to create a renewable energy and power trading unit intended to diversify the company’s revenue away from volatile oil prices.