Expanding wind and solar energy generation throughout Canada is crucial for developing a larger, cleaner electricity grid that aligns with the nation’s clean energy transition and climate objectives. However, to effectively manage the variability of these renewable energy sources, a more intelligent and adaptable electricity grid is needed. Enhancing grid flexibility can be achieved by integrating wind and solar power, strengthening grid interconnections, boosting demand-side flexibility, and implementing energy storage technologies.
Energy storage, particularly short-term grid-scale lithium-ion batteries, plays a key role in this transition by storing electricity for later use, thereby enhancing grid resilience and reducing the need for additional infrastructure and costly, emissions-intensive power plants. While lithium-ion batteries are commercially viable and increasingly cost-effective, long-term storage solutions like compressed air and flow batteries are still in the experimental stage, facing higher costs and uncertainty. Additionally, batteries can strengthen the reliability of electricity systems by providing backup power during disruptions in generation. This capability is becoming more critical as grids encounter the escalating challenges posed by extreme weather events associated with climate change.
Battery storage capacity is expected to grow significantly, both globally and in Canada. Global energy storage capacity is projected to increase 15 times by 2030. According to the Canadian Climate Institute, Canada’s battery storage capacity has already grown from 11 megawatts in 2016 to about 92 megawatts in 2023, with forecasts indicating it could reach 4,177 megawatts by 2028. However, to achieve Canada’s climate goals, capacity might need to surpass 12,000 megawatts by 2030 and approach 50,000 megawatts by 2050.
The rate of battery storage deployment will vary by region, with provinces like Quebec, Manitoba, and British Columbia needing less storage due to their abundant hydropower resources. To support this growth, the Canadian government, along with provincial authorities, is advancing policies and funding initiatives to accelerate battery storage projects. A set of proposed federal investment tax credits is expected to further speed up battery storage deployment in Canada. While the details are still being finalized, these tax credits for clean electricity, clean technology, and clean technology manufacturing will encompass battery storage projects as eligible investments.
To fully realize the potential of battery storage and meet climate goals, Canada must address barriers such as long project timelines, supply chain issues, and regulatory challenges. Adjusting market rules to recognize the multiple benefits of battery storage could help overcome these obstacles and support the development of a more resilient and flexible electricity system in Canada.
