Renewable Energy Generation Facility and Battery Energy Storage Systems Regulations

In October 2023, the Independent Electricity Systems Operator (IESO) put out a call for proposals for new Battery Energy Storage Systems (BESS). Through this competitive procurement process, the target is to procure 2,518 megawatts (MW) of year-round capacity from new build storage facilities larger than 1 MW. This represents the largest energy storage procurement ever in Canada. A report will be tabled at the November 30 Agricultural and Rural Affairs Committee on four proposed BESS projects within Ottawa. The following are frequently asked questions related to the procurement and BESS.

Battery Energy Storage Systems (BESS) – Frequently Asked Questions (FAQ’s)

What are Battery Energy Storage Systems (BESS)?

Battery Energy Storage Systems (BESS) are energy retention systems that store and then discharge electricity back into the electricity grid when supply is low or when energy is most expensive. Lithium-ion batteries, the same batteries that are used in cell phones and electric vehicles, are the dominant form of energy storage today because they hold a charge longer than other types of batteries, are less expensive, and have a smaller footprint.

BESS can be used in different ways. Utility scale BESS are used to support utility scale electricity supplies, as is evidenced in the recent competitive procurement by the Independent Electricity Systems Operator (IESO). They are also used to support power supplies in commercial and industrial operations, and to store energy supplied from rooftop solar and support electric vehicle charging in residential applications.

Who is the Independent Electricity Systems Operator (IESO)?

Electricity is a commodity that all residents use. It follows a process of production, transmission, and then direct delivery to customers. The Independent Electricity Systems Operator (IESO) manages the flow of electricity across Ontario and ensures reliability by monitoring and forecasting energy needs, and controlling when and how new production can be integrated.

Why does the IESO want to invest in BESS?

The IESO has identified new challenges in accessing reliable electricity supply, which are related to a number of factors including: increased demand from expanding electrification and business investment; pressures on supply from aging infrastructure with the retirement of the Pickering nuclear facility, the refurbishment at Bruce and Darlington facilities; and expiring electricity supply and capacity contracts that IESO has with privately owned energy retailers.

Without a mechanism for storage, the electricity produced must be used immediately or it will be wasted in times of oversupply during off hours and shortages during peak hours. BESS have been identified as an important part of our energy infrastructure to address the issue of peak hour shortages, as well as providing access to energy closer to home. BESS can also support renewable energy generation by way of wind and solar facilities, where production is intermittent.

As a result, IESO has identified the need to increase energy supply and storage capacity significantly, starting in 2025 through the latter part of the decade. In October 2023, the IESO put out a call for proposals for new BESS facilities. Through this competitive procurement process, the target is to procure 2,518 megawatts (MW) of year-round capacity from new build storage facilities larger than 1 MW. This represents the largest energy storage procurement ever in Canada.

What is a megawatt?

A Watt is the amount of energy (in Joules) that an electrical device (such as a light) is burning per second that it is running. One watt is equal to one joule per second. A megawatt (MW) is one million watts. One megawatt can supply enough power for approximately 1000 homes.

What is a Municipal Support Resolution?

Where a project is proposed in an area governed by a municipal government, the IESO requires proponents to obtain confirmation of municipal support through a Municipal Support Resolution (MSR) as part of the application process. An MSR is general in nature and does not preclude a project from having to meet municipal regulatory requirements or obtain any municipal development approvals or permits should they be selected by the IESO.

While proponents have up to 18 months following application deadlines to submit the MSR, projects that include an MSR with their application are granted four (4) additional Rated Criteria points, which gives them a better chance of being selected. Should a project not meet zoning requirements following IESO approval, they would not be permitted to move forward with their project.

Are there proposed BESS projects in Ottawa?

Yes. In keeping with Council direction, staff will be bringing a report to the November 30 Agricultural and Rural Affairs Committee on projects which are proposed in Ottawa and seeking a Municipal Support Resolution (MSR). Note that a MSR does not preclude all other regulatory, permitting, zoning and siting requirements that will apply to these projects.

Are there land use impacts associated with BESS?

Yes. BESS are facilties made up of several rechargeable batteries placed in containers that range in size. Utility scale BESS are often installed near existing electrical infrastructure such as sub-stations in large containers approximately 10 to 40 feet in length and approximately 8 feet in height and width.

Once constructed, utility scale BESS require only routine maintenance. They can be monitored remotely and therefore traffic and onsite parking are minimal. Site lighting at BESS facilities is also minimal, except for security purposes. The absence of employees also means there is no water or sewer requirements at BESS facilities. Noise generated by cooling fans may require mitigation through the use of sound barriers or landscaping. Reducing risk of fire is an important consideration for both municipalities and project developers since lithium-ion batteries contain flammable electrolytes that, if overheated, can short circuit and catch fire, also known as “thermal runaway”. This type of fire can be difficult to extinguish and BESS infrastructure costly to replace.

Are BESS facilities permitted in Ottawa’s Official Plan?

Yes. Public utility facilities that are authorized under the requirements of the Environmental Assessment Act may be permitted in all designations of the Official Plan. The Ministry of the Environment, Conservation and Parks has advised that the transmission components of a BESS facility (i.e., the transformer station(s), transmission line(s)) may be subject to the Class Environmental Assessment for Minor Transmission Facilities.

How are BESS facilities zoned?

BESS facilities are considered a Utility Installation as set out in Section 91 of the Zoning By-law as they form part of the energy infrastructure grid, similar to transformer stations, hydroelectric towers and substations. Utility installations are heavily regulated and must be appropriately located in keeping with their technical requirements for site selection. As such, they are permitted in most zones of the city. BESS facilities on land zoned Agricultural (AG) are limited to two per cent of the total lot area, to a maximum of one hectare.

A review of existing municipal approval and permit requirements for BESS projects is currently being undertaken to understand where any gaps may exist. Specifically, staff are exploring whether amendments to zoning and or the Site Plan Control By-law 2014-256, are appropriate to apply to BESS and may be included as part of an upcoming report in Q1 2024 with zoning provisions for renewable energy generation facilities.

Are BESS facilities safe?

The BESS industry is undergoing rapid growth and development. Lithium-ion batteries, commonly used in mobile phones and electric cars, are currently the dominant storage technology for large scale BESS facilities. Concerns have been raised regarding the safety of BESS facilities because lithium-ion batteries contain flammable electrolytes that, if overheated, can short circuit and catch fire, also known as “thermal runaway”. This type of fire can be difficult to extinguish and BESS infrastructure costly to replace. Reducing risk of fire is therefore an important consideration for both municipalities and project developers. Technology is consistently being improved with safety features to address these concerns, including cooling systems and real time temperature monitoring.

As part of the IESO approvals process, BESS are also required to create an emergency plan, and proponents are engaging in planning and training efforts directly with local fire departments. Hydro One recently reevaluated the setbacks required to protect their infrastructure in case of fire and have proposed to reduce those setbacks from 500 metres to 150 metres due to improved technology and reduced risk.

Who sets the fire safety requirements for BESS?

Fire prevention and safety is a key feature of lithium-ion batteries and their battery management system, which typically involves several layers of protection, including:

1. Certification and Testing using UL 9540A – the test method for evaluating thermal runaway.
2. Installation to NFPA 855 – National Fire Protection Association (NFPA) Code 855 is the Standard for the Installation of Stationary Energy Storage Systems.
3. Monitoring and protection, through monitoring cell temperature, current and voltage and bringing mal-performing modules out of service until the route cause can be addressed.

NFPA 855 is not the code in Canada; however, it is considered industry best practice and is generally followed, particularly regarding site layout and system integration.

Ottawa Fire Services has been involved in reviewing the proposed BESS facilities and are continuing to evaluate best practices for emergency response planning of BESS facilities. The IESO requires that BESS proponents fulfill municipal requirements for emergency response. Ottawa Fire Services (OFS) develops emergency response plans based upon the occupancy and hazards for the location and then develops standardized response codes that meet these needs. OFS will ensure that fire protections systems are sufficient and meet applicable standards as well as determine the training requirements for all OFS members.

Who inspects BESS projects for safety?

In 2013, UL Standards was accredited by the Standards Council of Canada (SCC) as a nationally recognized Standards Development Organization (SDO) able to develop National Standards of Canada (NSCs). The following certification is required for BESS facilities:

• Battery cells, modules and racks must be certified to UL 1973 Standard for Batteries for Use in Light Electric Rail (LER) Applications and Stationary Applications.
• Battery cells, modules, and units (racks) are tested to UL 9540A Standard for Test Method for Evaluating Thermal Runaway Fire Propagation in Battery Energy Storage Systems.
• UL9540 Energy Storage Systems and Equipment is a system level certification for the batteries and the inverters. Both UL1973 certification and UL9540A testing at cell, module, and rack level are required for UL9540 listing/field certification.
• In Ontario, UL9540 (or SPE 1000 labeling confirming compliance to UL9540) is required for the electrical inspector and formal authorization to connect to the grid.

Are there any municipal approvals required for BESS projects?

Yes. BESS projects must comply with municipal land use and zoning requirements before they can be built. BESS are permitted in most zones of the city under Section 91 of the Zoning By-law. It is likely that most BESS facilities will also require a building permit, based on their size alone, which will be determined on a case by case basis.

Timing of required Zoning Amendments

The City of Ottawa is preparing a New Zoning By-law, scheduled to be completed in 2025, to ensure conformity with the approved new Official Plan.

On February 22, 2023, City Council approved a motion directing staff to develop the zoning provisions for renewable energy generation facilities (in accordance with Section 4.11 of the OP) in advance of the new Zoning By-law.

The need for an expedited process is due to overly broad permissions for energy sector infrastructure in the existing zoning by-law, coupled with new requests for proposal (RFP) by the Independent Electricity Systems Operator (IESO) to initiate new energy projects in Ontario. The IESO RFP process is geared towards independent projects that would not be exempt from zoning under provincial legislation. There is, therefore, an advanced need for zoning provisions to ensure that upcoming development proposals will be in compliance with OP policy.

Interim Zoning Measures

Prior to the release of the draft REGF provisions in fall of 2023, to ensure that REGF applications currently being filed with the IESO are not approved under the broad permissions for ‘Utility Installations’ in the Zoning By-law (which would be inconsistent with the new Official Plan), an interim zoning by-law amendment to define REGF independently from other types of Utility Installations was approved by Council on with the new land use definitions being as follows:

Utility installation means the equipment used to make or deliver a utility product, commodity or service and includes the actual building, plant, works, utility line, tower, relay, pedestal, and may also include a storm water management facility, but excludes antenna systems and renewable energy generation facility

Renewable energy generation facility means a facility as defined in the Electricity Act, 1998, S.O. 1998, C. 15 Sched A, and not exempt under section 62(1) of the Planning Act, R.S.O, 1990, c. P.13..

Note that the use ‘renewable energy generation facility’ was not added as a permitted use to any zones at the time of the interim amendment. Staff have been involved in IESO consultation efforts and the temporary removal of REGF uses from land use permissions in the Zoning By-law is not anticipated to affect timelines for potential projects advancing through the IESO RFP process.

Zoning Intent

It is not the City’s intent to duplicate the provincial approvals process for renewable energy generation infrastructure. Rather the focus of the proposed zoning by-law amendment is to build upon existing provincial review processes to address local land use compatibility concerns and direct such development to the most appropriate locations within the parameters directed by the Official Plan.

Energy generation and storage infrastructure is not something that has previously been regulated by municipalities and requires thoughtful consideration of potential impacts from local considerations of potential land use conflicts, to the energy, resiliency, and climate impacts that may be associated with limiting opportunities for new energy generation projects.

The City will not be conducting, evaluating or commenting on independent health and safety research with respect to renewable energy infrastructure. Staff will be looking to the expertise and direction provided by the Ministry of Public Health, Ministry of Environment, and the Ministry of Energy in incorporating health, safety, and environmental considerations that may be associated with renewable energy generation and storage infrastructure into zoning and/or other potential municipal review processes such as Site Plan Control.

Zoning Drafts

Zoning provisions being developed for energy generation and storage infrastructure will not outright preclude any of the potential uses in the city. Provisions will be focused on establishing the following for various types of energy generation and storage infrastructure in the city where they do not outright preclude any of the potential uses:

• lot coverage standards
• minimum setbacks
• screening requirements
• maximum heights

Provisions are being developed in a manner that is consistent with the Official Plan and ensures locally-sensitive opportunities for new REGF developments.

Public and Stakeholder Input

Public and stakeholder input is an important part of developing locally-sensitive zoning provisions. In meeting the directives of the Official Plan, public and stakeholder input is recorded and considered carefully. Staff have received numerous constructive comments from public and industry stakeholders to date and encourage continued feedback and participation in this process. Every effort will be made to incorporate feedback and requests submitted into the upcoming amendments, to the extent possible within the framework of the Planning Act, and meeting the directives of the Official Plan.

Provincial Direction

The repeal of the Green Energy Act in 2019 restored municipal authority to regulate renewable energy generation land uses in Ontario, offering a new opportunity for municipal input on the siting of such infrastructure.

The Ontario Planning Act sets the rules for establishing municipal zoning by-laws, permitting municipalities to regulate the location of any energy generation and storage uses that are not undertaken by a Transmitter (Hydro One Corporation) or Ontario Power Generation, which are exempt from zoning under Section 62(1). In addition to renewable energy generation and storage infrastructure, the exemption does not apply to natural gas power plants where they are run by independent operators, providing limited opportunity for additional zoning provisions beyond the renewable sector.

The majority of REGF projects in Ontario are carried out by private enterprises or as joint projects with OPG or Hydro One Corporation, meaning that the majority will be subject to municipal zoning regulations.

There are certain classes of REGF projects [JCM1] which must obtain a Renewable Energy Approval (REA) from the Ministry of Environment, Conservation and Parks per Part V.0.1 of the Environmental Protection Act and O. Reg. 359/09. Provincial approval submission requirements vary depending on the project, however in all cases the applicant must provide evidence of both compliance with municipal policies and local public consultation. REA required public consultation is independent of any consultation that may be required by the municipality.

Ottawa Official Plan Direction

In recognition of the above, the City established Official Plan direction for the siting of such uses during the development of our new Official Plan, which was approved by the Ministry of Municipal Affairs and Housing in November of 2022.

Specifically, Section 4.11 of the Official Plan provides guidance on where large-scale renewable energy facilities that are subject to a provincial procurement and approvals processes may be permitted. The OP also provides direction for where ‘subordinate’ renewable energy generation infrastructure that is not subject to provincial approvals, due to limited energy generation potential, may be permitted. [AM2] [JCM3] [JCM4] [JCM5] Note that small-scale accessory use energy generation infrastructure, such as rooftop solar panels or a residential geothermal installation, is currently and will continue to be permitted in the zoning by-law everywhere that it functions to aid and contribute to the principal use of land.

As a principal use of land, the Official Plan permits renewable energy generation facilities in the following designations:

• Rural Countryside (see Schedule B9)

• Greenbelt Rural and Greenbelt Facility (see Schedule B9)

• Natural Environment Area - Greenspace sub-designation (see Schedules C11-A, C11-B and C11-C)

As a subordinate use of land (ancillary to a principal use), the Official Plan also permits renewable energy generation facilities in the following designations:

• Agricultural Resource Area (see Schedule B9)

• Rural Industrial and Logistics (see Schedule B9)