This report builds on an analysis completed for Natural Resources Canada (NRCan) in 2025 that examined the potential for distributed utility-controlled thermal energy storage (TES) to mitigate increases in peak electricity load in a net zero future (available below). In this second phase, NRCan was interested in the impact of TES on the electricity system during charge cycles leading up to peak, and the impact on electricity system costs. The analysis utilizes Navius’ in-house energy-economy-electricity model, gTech to examine scenarios with and without distributed utility-controlled TES and battery energy storage systems (BESS) technologies to quantify the impact on the electricity system during the coldest periods of the year and on electricity system costs.

Achieving net zero emissions in Canada requires significant electrification, including the electrification of space heating in buildings, which is expected to increase peak load, electricity system costs, and electricity prices across Canada. Natural Resouces Canada contracted Navius to examine ways to mitigate increases in peak electricity load, specifically by examining the potential role of distributed utility-controlled thermal energy storage (TES) in reducing peak. This study quantifies the impact of distributed TES on Canada’s electricity systems using Navius’ in-house energy-economy-electricity modeling framework, gTech.