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Massachusetts forges ahead with plans for an energy storage mandate


According to Market Intelligence, December 2022


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Massachusetts forges ahead with plans for an energy storage mandate

Massachusetts Gov. Charlie Baker's administration has decided to move forward with plans to implement a possible 600-MW energy storage mandate by 2025 for merchant utilities within the state.

The Department of Energy Resources, or DOER, has deemed it is "prudent for the Commonwealth to set targets for energy storage systems," according to a Dec. 27 letter from DOER Commissioner Judith Judson that was sent to state lawmakers. Judson acknowledged that the DOER decision now tasks the state agency with crafting targets by July 2017. The public has until Jan. 27, 2017, to file comments.

The letter comes as DOER fulfills an order to decide on the matter by the end of 2016 as directed by the comprehensive energy law signed by Baker in August. The law suggested achievable targets by 2020 and authorized pairing renewables with energy storage technologies, such as batteries, flywheels, thermal and compressed air technologies, to allow merchant generators, utilities and customers to store and discharge energy as needed instead of purchasing or generating more expensive electricity at times of peak demand.

In September, the DOER released analysis and recommendations that claimed deploying 600 MW of advanced energy storage technologies onto Massachusetts' grid by 2025 would save ratepayers more than $800 million in energy costs and reduce 350,000 metric tons of greenhouse gas emissions over 10 years. The report's study of energy usage from 2013 to 2015 also found that the most expensive 10% of peak demand hours account for 40% of energy costs.

Peter Shattuck, Massachusetts director of the pro-renewable Acadia Center, said in a recent online post that Massachusetts' proposed energy storage target of 600 MW by 2025 would be the highest in the nation.

"Storage deployed at scale will serve the same purpose as warehouses and refrigerators in our food system by rationalizing an energy grid that is massively overbuilt to match supply and demand every second of every day," said Shattuck.

Under its energy storage initiative, DOER is currently offering $10 million for demonstration projects, while the state's Massachusetts Clean Energy Center has invested $9 million in storage-related initiatives and is pairing up developers and potential customers.

Shattuck explained that further incentives in Massachusetts are being considered under a new solar incentive mechanism that is being developed so that energy storage projects paired with solar can receive payments from two to seven cents/kWh based on storage duration and power relative to solar capacity.

Shattuck concluded that, with energy efficiency investment plans of $700 million a year and utilities piloting demand programs aimed at integrating thermal and battery storage, "attention to demand resources is likely to increase as peak demand flatlines, overall consumption declines, and the focus on improving system efficiency at all levels grows."