Bill 86 and the Integration of Energy Storage: How this can lead to an Unlimited Self-Supply of Electricity in Alberta

By - David
07.01.22 12:37 PM

On November 17, 2021, the Alberta government introduced the Electricity Statutes Amendment Act (Bill 86). This bill will update existing legislation to enable greater integration of technical innovations to Alberta’s electricity system, this will provide long-term benefits for both consumers and the electricity industry.

If Bill 86 is passed, it will address the changing ways that electricity producers and consumers interact with and use the province’s power grid to encourage adoption and investment in emerging energy systems and technologies. Particularly, it will provide needed clarity on : 1) what constitutes an energy storage asset; 2) who may own an energy storage asset; and 3) electricity market participation.


What Constitutes an Energy Storage Asset and Who May Own One? 

Previously, energy storage was considered as a “generating unit” when it discharged electric

This is one of the key changes of Bill 86 because it will allow for clarity on what constitutes an energy storage asset and assist with the integration of energy storage into Alberta’s interconnected electricity system in both the competitive electricity market and the transmission and distribution system.


In regards to who may own an energy storage asset, Bill 86 would allow for companies to hold private ownership over energy storage resources (for their own use or export to the grid) by a transmission or distribution facility owner or utility.


Market Participation 

Bill 86 would prohibit market participation for notwithstanding transmission and distribution facility owners or utilities owning energy storage resources. This prohibition hopes to facilitate the use of these utility owned energy storage resources as non-wires alternatives in transmission and distribution system planning. As well, energy entering or leaving the grid must be exchanged through the power pool.


Key changes

If passed, the Electricity Statutes Amendment Act will:

  • allow unlimited self-supply with export, technology that allows electricity to be generated on-site with excess power sent to the grid, while ensuring that transmission system costs are balanced among all system participants
  • build on the Alberta Utilities Commission Distribution System Inquiry on modernizing Alberta’s electric distribution system to ensure the cost-effective integration of distributed energy resources in the system
  • add a requirement for distribution owners to prepare long-term plans as per future regulations, which will describe the outcomes and timing of the plans


Unlimited self-supply with export

Currently there is a general prohibition from on-site generators exporting excess electricity to the grid, these are:

  1. industrial operations with an industrial system designation (“ISD”);
  2. small-scale renewable energy sources (“micro-generators”);
  3. oil and gas facilities using natural gas that would otherwise be flared; or
  4. certain municipally owned generators.[10]

Prior to 2019 and 2020 there was no clarity on the definition of on-site generators that were generating and consuming electricity on their own site and operating “behind the fence”. Before, these types of consumers were not allowed to export their excess electricity to the power pool. Bill 86 seeks to remove this general prohibition, a policy supported by most stakeholders in Alberta, by allowing unlimited export of excess electricity from self-suppliers to the power pool.


Final Remarks

Although Bill 86 contemplates for high-level integration of energy storage into the grid, it should evaluate some aspects regarding the deployment of energy storage. This is an opportunity to develop successful policies in areas such as: energy storage as non-wires alternatives, the utilization of  “hybrid assets”, the allocation of transmission systems costs, treatment of energy storage in AESO and distribution utilities’ tariffs, etc.

Bill 86 is scheduled for the Third Reading on December 1, 2021. If it is passed, the amendments are expected to be proclaimed into force at the same time the related regulations are brought into force. The goal of the Alberta government is to finalize the amendments in 2022.




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