Baker-Polito Administration Sets 200 Megawatt-Hour Energy Storage Target
Commits up to $10 Million of Additional Funding and to Examining Inclusion of Additional Energy Storage Technologies in Commonwealth’s Portfolio Standard
BOSTON – In accordance with bipartisan energy diversification legislation signed by Governor Baker in August 2016, the Baker-Polito Administration today announced a 200 Megawatt hour (MWh) energy storage target to be achieved by January 1, 2020. The target, set by the Department of Energy Resources (DOER), builds upon Governor Baker’s Energy Storage Initiative (ESI), a $10 million commitment to analyze opportunities to support Commonwealth storage companies and develop policy options to encourage energy storage deployment.
In order to continue supporting the development of energy storage in the Commonwealth, the Administration also announced up to $10 million in additional funding for energy storage demonstration projects that are consistent with the findings of the ESI’s State of Charge study and that DOER will examine the benefits of amending the Alternative Portfolio Standard (APS) to expand the eligibility of energy storage technologies able to participate.
“As the Commonwealth continues to make unparalleled investments in renewable energy, energy storage technologies have the potential to play an integral role in effectively deploying these new resources,” said Governor Charlie Baker. “This target, paired with our Energy Storage Initiative, will cause the state and industry to lead the way on exploring the most cost-effective deployment of energy storage for Massachusetts’ ratepayers.”
“Energy storage has the ability to unlock the full potential of clean, renewable energy resources, while reducing ratepayer costs and emissions,” said Lieutenant Governor Karyn Polito. “Today’s target will continue Massachusetts’ leadership in developing and adopting innovative clean energy technologies and policies that ensure we have a clean, affordable, and resilient energy future.”
State of Charge, released by DOER in September 2016, identified hundreds of millions of dollars of potential ratepayer benefits from the deployment of energy storage in Massachusetts. Since its release, DOER has already implemented a number of the report’s recommendations to promote energy storage in the Commonwealth. They include, but are not limited to, becoming the first state in the nation to incentivize the pairing of energy storage with solar in the new proposed solar incentive program, SMART; authorizing the pairing of energy storage technologies with the largest procurement of clean and offshore wind energy generation in state history, 9,450,000MWh of clean energy generation and 1,600MW of offshore wind energy generation; continued energy storage grant opportunities through the Community Clean Energy Resiliency Initiative; and funding energy storage projects through the Peak Demand Reduction Grant Program. Additionally, in March, the Massachusetts Clean Energy Center (MassCEC) and DOER launched the second phase of ESI, a $10 million grant program for energy storage demonstration projects, Advancing Commonwealth Energy Storage (ACES).
“State of Charge showed that energy storage has the potential to be a game changer for Massachusetts, with hundreds of millions of dollars of ratepayer and system benefits,” said Secretary of Energy and Environmental Affairs Matthew Beaton. “The 200MWh target, developed with the feedback of a wide range of stakeholders, will build upon the Baker-Polito Administration’s commitment to growing the deployment of energy storage throughout the Commonwealth.”
“The Commonwealth is leading the nation in opportunities to pair energy storage with renewable energy, from our new solar incentive program SMART to the newly authorized clean energy procurements,” said Department of Energy Resources Commissioner Judith Judson. “This target is an important next step in developing the energy storage market in Massachusetts and better informing the state and industry on best deployment practices.”
“This commitment further strengthens Massachusetts’ nation-leading effort to increase the deployment of renewable energy and simultaneously modernize the electrical grid,” said MassCEC CEO Stephen Pike. “The Commonwealth’s leadership in supporting a diverse energy mix will help our cleantech sector attract significant private investment, drive job creation and improve resiliency through energy storage innovation.”
In calculating the achievement of the target, DOER will consider procurement methods including, but not limited to, the refinement of existing clean energy procurement methods, participating in alternative compliance payment funded pilot programs in which the company is an awardee or in a partnership with an awardee, and through the use of energy efficiency funds. The target is meant to fulfill the intention of the legislation in a way that complements the planned course of the ESI so that the Commonwealth can learn about the most cost-effective and viable deployment of energy storage and inform future policies. Additionally, the target sets a flexible goal for the electric distribution companies to identify the most cost-effective applications and the best locations for energy storage deployment, including both in front of the meter and behind the meter applications.
“This target is a great first step in making energy storage a deserved pillar of our energy landscape,” said Senate President Pro Tempore Marc R. Pacheco (D-Taunton), founding chair of the Senate Committee on Global Warming and Climate Change. “The advances taking place in both the private and public storage arenas will be a game changer. The power produced by our renewables needs to be saved and used to make our grid as efficient and stable as possible. If we are to truly embrace a clean energy future, we need to keep our power flowing efficiency and cleanly at both low- and peak-demand periods. I hope to build upon these targets as our legislative session continues and push ahead to make Massachusetts, once again, the foremost leader in energy efficiency.”
“The Baker-Polito Administration’s commitment to energy storage will yield substantial benefits for the deployments of renewable resources throughout the Commonwealth,” said Speaker Pro Tempore Patricia A. Haddad (D-Somerset). “I look forward to working with the Administration and my colleagues in the Legislature to build upon the 200 megawatt-hour target and Department of Energy Resources’ significant policy initiatives and funding opportunities to further spur the development of this innovative industry in Massachusetts.”
“Effective storage is the key to using renewable energy sources to address base load demand, and this ambitious but achievable 200 megawatt hour target will put us on a determined path to a future that integrates these tools,” said Senate Minority Leader Bruce E. Tarr (R- Gloucester).
“I applaud the Baker-Polito administration for embracing a suite of policy options to deploy energy storage as they demonstrate the benefits storage brings through bill savings, grid resiliency, and clean energy jobs,” said Joint Committee on Telecommunications, Utilities, and Energy Chair Thomas A. Golden, Jr., (D-Lowell). “The target builds off of last session’s historic clean energy legislation and lays the groundwork for a transformative industry with the potential to be a key player in our clean energy ecosystem. I look forward to working with the administration to complement these nation-leading programs.”
“Today’s announcement represents an important step forward in the Commonwealth’s efforts to promote energy storage policies that will help lower energy costs, improve system reliability, and reduce the state’s carbon footprint,” said House Minority Leader Bradley H. Jones, Jr. (R-North Reading). “The Baker-Polito Administration has put forth a viable proposal that not only sets a realistic energy storage procurement target, but also provides additional incentives to expand the state’s storage capacity moving forward.”
An Act Relative to Energy Diversity requires that each electric distribution company submit a report to DOER no later than January 1, 2020 detailing how they have complied with the energy storage target set by the department. To better understand the achievement of the target, DOER has asked that the electric distribution companies submit annual reports beginning on January 1, 2018. DOER has requested that the reports include information on the amount of energy storage procured by each company, the cost-effectiveness of the energy storage projects undertaken, how wholesale market opportunities were identified and monetized, and for any recommendations for programs and policies to ensure the continued cost-effective deployment of energy storage. Based on lessons learned from this initial target, DOER will determine whether to set additional procurement targets beyond January 1, 2020.
“Massachusetts should be congratulated for their holistic efforts to incorporate energy storage into multiple state programs focused on clean energy and grid reliability,” said Matt Roberts, Executive Director of the Energy Storage Association. “We look forward to working with the Baker-Polito Administration and leaders in the Legislature to build upon this initial target so that Massachusetts residents can reap the benefits of a more reliable, flexible, and affordable electric grid.”
“NECEC is pleased to see the Baker-Polito Administration set this initial target, which can begin to put us on the path towards a stronger energy storage industry in Massachusetts,” said Northeast Clean Energy Council President Peter Rothstein. “We stand ready to work with the Administration and the Legislature to expand on this goal so that we can demonstrate that Massachusetts is the place for companies to invest in storage.”
“Our members, many of whom are very concerned about the high cost of electricity in Massachusetts, are interested in energy storage as a means to reduce energy costs. We hope this technology will be quickly integrated into current energy efficiency programs for commercial and industrial consumers,” said Robert Rio, Senior Vice President, Associated Industries of Massachusetts. “We applaud the Governor for his early recognition of this technology and the steady progress his administration is making to study appropriate opportunities for customers to access its use and demonstrate its functionality and effectiveness for all ratepayers.”