Massachusetts took a significant step to acknowledge that effective and efficient renewable energy storage – the commercial capture of renewable energy to offset demand at a later time – can aid in the growth of wind and solar power and save ratepayers money. Massachusetts may become the third state to adopt a renewable energy storage mandate, following in the footsteps of California and Oregon. In August, the Massachusetts legislature passed a bill, titled “An Act to Promote Energy Diversity,” that gives the Massachusetts Department of Energy Resources (DOER) the ability to mandate what the energy storage targets.
Under the energy storage law, DOER has until the end of 2016 to determine whether to set an energy storage procurement target for the state’s utilities. DOER would have until July 1, 2017 to adopt specific procurement targets, and utilities would have until January 1, 2020 to comply with those targets. The targets would then be periodically reevaluated. In order for energy storage to qualify under the law, a storage system must reduce greenhouse gas emissions, cut demand for peak electrical generation, avoid new investment in generation, transmission or distribution assets, or improve the reliability of the grid. The law requires Massachusetts utilities to solicit and contract for approximately 1,200 megawatts (MW) of clean energy in the form of hydro, onshore and offshore wind, solar, and other renewable sources. The bill sets up new ownership models for energy storage and includes mandates that encourage the development of offshore wind projects.
On the heels of the passage of the law, DOER issued a 200-page report in mid-September titled “State of Charge: Massachusetts Energy Storage Initiative Study” laying out a new energy storage policy for the state. The report recommends a storage target of 600 MW that would account for 5% of Massachusetts’ peak load. The DOER report concluded that 600 MW of storage capacity installed by 2025 would save the state’s ratepayers $800 million in system costs. The report set an optimal and eventual deployment goal of 1,766 MW of storage, or approximately 15% of Massachusetts’s peak load. The report revealed an impressive value proposition: this optimal storage level would yield $2.3 billion in ratepayer benefits; $1.1 billion in direct benefits to the resource owners from market revenue; $250 million in regional system benefits to the other New England states due to lower wholesale market prices; and a reduction in greenhouse gas emissions of more than 1 million metric tons of carbon dioxide over a 10 year time span, the equivalent of taking over 223,000 cars off the road.
The DOER report augments the new energy storage law and makes a very strong case for ratepayer savings and environmental benefits resulting from integrating storage into the mix, while laying the foundation for other states to follow suit and implement their own energy storage policies and laws.