New indicators show that utility-scale battery storage is starting to take off, providing lower costs, greater flexibility and emissions benefits.

What’s new?

The costs of utility-scale batteries are sharply falling. In the past decade, the cost of installed batteries has fallen about 20 per cent per year on average. Lower costs have enabled global annual battery installations to grow by 80 per cent per year. Canada is starting to follow these global trends as utilities turn to batteries to support grid flexibility, which refers to the ability of a grid to respond to changes in power supply and demand in real time. 

Batteries can quickly respond as conditions change, discharging electricity at times of higher demand, and absorbing or storing excess supply. They pair especially well with wind and solar energy, smoothing out their intermittent generation and increasing flexibility, allowing grids to access clean power when the wind isn’t blowing or the sun isn’t shining. 

This week’s Insight explores Canada’s progress on battery deployment, which is an indicator in the transition to bigger, cleaner, smarter electricity systems.

Battery storage capacity in Canada has grown sharply over the past ten years

To track renewable and battery deployment, we used the Canadian Renewable Energy Association’s annual data release. This data includes battery energy storage systems (BESS). Although other energy storage technologies exist at scale, such as pumped storage hydropower, they are not included in our analysis. 

While still at modest levels, battery storage capacity is starting to take off—Canada surpassed 900 megawatts (MW) of capacity in 2025 (Figure 1). Importantly, more battery storage projects are coming online than before and they are also storing power for longer.  

Megawatts are typically used to describe battery capacity, while megawatt hours (MWh) measure the total amount and duration of energy that can be stored. Greater MWh duration means power can be fed back onto the grid for longer. Between 2016 and 2025, the average duration of installed battery storage grew by more than 12 times, from 2.5 megawatt hours (MWh) to more than 31 MWh in 2025.

However, without sufficient scale up of storage, renewables risk wasting clean power, along with the cost savings and emissions benefits that come with it, when electricity supply exceeds demand on the grid—an issue known as curtailment. 

Figure 1

Battery storage is enabling more modern, flexible grids in Canada 

Batteries enable stored renewable energy to be deployed during peak demand, helping renewables make up a higher share of total generation. Further, the falling costs of batteries gives utilities a cleaner and cheaper way to meet peak demand than fossil fuel alternatives. Batteries are not the only way to add flexibility to the electricity system, but as prices fall they offer a cost-competitive way of doing so. 

One way to measure the flexibility offered by batteries is to compare their total capacity to the quantity of renewable capacity that is theoretically available to the grid. A higher ratio means a greater share of renewable energy can be stored for later use (Figure 2). As an indicator of the clean energy transition, this ratio should be increasing to catch up with renewable deployment. Adding more renewable generation capacity without further battery additions will drive the ratio down.

Figure 2

Utilities are starting to deploy battery storage projects. Ontario is home to the largest new additions of battery storage, adding valuable flexibility to its nuclear-heavy supply mix. Ontario’s 2025 Oneida Energy Storage project brought 250 MW of storage online that can be stored for up to 4 hours, adding 1,000 MWh to the system. This is Canada’s largest project to date, has partial Indigenous ownership, and is part of the province’s plan to add nearly 3,000 MW of storage capacity by 2028. Oneida drove the national average ratio of battery duration to renewable generation capacity from 9 per cent in 2024 to 25 per cent in 2025, while Ontario’s ratio rose from about 11 per cent to nearly 55 per cent in the same period.

New Brunswick illustrates a common theme across the country – focusing on renewables with lagging battery additions. New Brunswick’s batteries can help shift almost 11 per cent of renewable capacity to later hours in the day. However, the province does not have new battery projects planned before 2030. This means with new wind projects set to come online during that period, the share of shiftable renewable capacity will decrease. 

However, not all provinces are focusing on batteries. Some provinces have no battery storage projects. Since hydropower can also provide flexibility, hydro-heavy provinces like British Columbia, Quebec, and Manitoba will likely require less BESS as pumped storage hydropower can also act as storage. In 2016, British Columbia had the greatest share of shiftable renewables in the country, showing the value of BESS even for hydro-heavy provinces. Although their share of BESS as a proportion to wind and solar has declined as they’ve added more wind and solar capacity without proportional battery additions, their system remains one of the most flexible in North America. 

Battery storage in Canada needs more of a leg up 

Battery development needs to significantly scale up to make Canadian grids more flexible, efficient, and better able to handle more low-cost renewable supply. Batteries can do so at a lower cost than fossil fuel alternatives. Additionally, batteries can improve grid reliability and manage grid congestion, offering benefits even in provinces with already flexible hydropower generation. 

Existing federal incentives like investment tax credits, the Smart Renewables and Electrification Pathways Program, and Canada Infrastructure Bank financing are supporting battery deployment. But recent growth in battery capacity is just the beginning. A modern, clean electricity grid is a more flexible grid. That depends on unlocking more potential from utility-scale batteries. 

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Lisa Alers-Hankey is a Research Associate at the Canadian Climate Institute.