Demand-Side Distributed Energy Resources (DERs)
Objective
The Atmospheric Fund (TAF) is looking to provide grants to support projects that involve the design, development, and/or demonstration of distributed energy resources (DER) projects in the Greater Toronto and Hamilton Area that have the potential to contribute to local and system-wide capacity needs at scale.
Context
Ontario is in an energy transition. Local and system-wide electricity needs are expected to increase significantly as we electrify our buildings, vehicles, and industries. In response to this forecasted increase in electricity demand, the province has contracted or announced plans to increase its nuclear, gas-fired, and battery storage capacity. While these investments are targeted at increasing the capacity of the bulk supply system, electric loads paired with smart technologies and controls are set to transform the way our local grids are planned and operated.
A study commissioned by the Independent Electricity System Operator (IESO) last year showed that DERs have the economic potential to meet all incremental peak capacity needs over the next decade. There are multiple initiatives under way that aim to fully integrate and compensate DERs for the value they provide to both transmission and distribution grids.
- The IESO is engaged in its DER Market Vision and Design Project, expected to conclude in 2026, that will enable the staged integration of DERs into the wholesale electricity market.
- The Ontario Energy Board (OEB) is implementing its Framework for Energy Innovation for the integration of DERs within Local Distribution Company (LDC) planning and operations and use as non-wires alternatives (NWAs).
- LDCs, such as Toronto Hydro and Alectra Utilities, are piloting local capacity markets, laying the groundwork for demand response products to address distribution-level needs.
Until robust frameworks and mechanisms are in place, however, the market for many potential DERs (other than distributed generation) is limited due to the lack of compensation for the value they bring to the grid. Establishing these frameworks and developing and scaling the DER market may take the better part of this decade.
Developing and demonstrating DER technologies and programs can build confidence in them as a scalable solution, expedite their adoption once a market is in place, and ensure DERs are fairly evaluated alongside more traditional bulk supply options in future long-term planning efforts. TAF is seeking to support the design, development, and/or demonstration of scalable DER initiatives through this targeted call.
What We’re Looking For
Stage: The pathway for scaling a technology or program typically involves the following stages:
- Program Design and Development
- Demonstration and Iteration
- Deployment at Scale / Long-Term Program
TAF intends to support scalable and economically viable demand-responsive DER projects/programs in the first two stages.
Focus: While we’re open to any proposal that can shed or shift demand when the grid is at or near capacity, we’re especially interested in proposals that focus on the following applications:
- Heating, Ventilation, and Air Conditioning (HVAC) w/ Smart Controls*
- Electric Water Heating w/ Smart Controls*
- Smart EV Charging (V1G) or Vehicle-to-Building/Load/Grid (V2X)
- Thermal or Battery Energy Storage
*Proposals centered on HVAC or electric water heating applications should focus on contributions to demand response and/or peak shifting.
This call is targeted at enabling load flexibility in the grid. TAF also recognizes the value of local generation projects (for example, rooftop solar) in meeting system energy and capacity needs and providing benefits to residents and businesses and will be pursuing other avenues to support these types of projects outside of this targeted call.
Scalability: Proponents are required to describe how their project would achieve scale, including what future funding, capacity, and/or regulatory changes would be required to achieve it.
Eligibility and Terms
To be eligible for funding, projects must:
- Focus on proven technologies (TRL 7 at minimum).
- Be located in the Greater Toronto and Hamilton Area (GTHA).
TAF will contribute up to a maximum of $300,000. Proposals that include other contributions (cash or in-kind) from the applicant and/or other funding sources towards the project are strongly encouraged. We are looking to fund projects up to two years in duration at this stage.
Projects are open to all organizations, including for-profit companies, non-profit organizations, registered charities, municipalities, and LDCs. Grants to for-profit entities will be conditionally recoverable by TAF up to the awarded amount, with terms that recognize the intention of enabling innovation in this emerging ecosystem and supporting (and not inhibiting) commercialization.
A standard deliverable-based Contribution Agreement is required for any award.
Timeline and Process
| Milestone | Scheduled Date |
| Proposals due | September 22, 2023 |
| Contract award date | December 2023 |
| Expected project start date | January 2024 |
If you are interested in submitting a proposal, please contact our grants manager at grants@taf.ca by September 1, 2023 to discuss your project idea and request an application form.