Baker-Polito Administration Releases Energy Storage Report

The Baker-Polito Administration today released a comprehensive report, State of Charge, detailing the value of deploying energy storage in Massachusetts and a roadmap of policy recommendations for growing the energy storage market and industry in the Commonwealth. The report found that the addition of energy storage to the state’s diverse energy portfolio could realize hundreds of millions of dollars in cost savings for Massachusetts ratepayers, shave the impacts of peak demand on the state’s energy infrastructure, and reduce carbon emissions by better integrating renewable resources into Massachusetts’ energy infrastructure. State of Charge was commissioned as part of the Administration’s $10 million Energy Storage Initiative, aimed at making Massachusetts a national leader in energy storage.

“Massachusetts has a proud history of being on the forefront of technological and renewable energy innovation and this report clearly shows the enormous potential energy storage has for the state,” said Governor Charlie Baker. “As demand for renewable energy sources increases, this administration is committed to ensuring that the Commonwealth maintains reliability and energy affordability, as demonstrated by the recent bi-partisan comprehensive energy legislation.”

The comprehensive energy diversification legislation recently enacted by Governor Baker makes Massachusetts only the third state in the nation to authorize an energy storage procurement target, if the Department of Energy Resources deems such a target prudent.

“Our Administration recognizes that increased energy storage is a vital next step in ensuring that Massachusetts remains a leader in modern energy policies,” said Lieutenant Governor Karyn Polito. “Adding energy storage to the Commonwealth’s portfolio of energy resources will not only lead to lower energy prices for ratepayers, but will help create new, high paying jobs in a growing field.”

Advanced energy storage technologies include batteries, flywheels, thermal and compressed air technologies that allow utilities and electricity customers to store and discharge energy as needed instead of purchasing or generating more expensive energy during times of high  demand. The study found that on average from 2013-2015, Massachusetts electricity customers annually spent over $3 billion, 40% of the total annual electricity spending by consumers in Massachusetts, on the top 10% most expensive hours. In addition to managing energy costs, energy storage can provide power during storm-related power outages or when renewable generation is low, such as at night, when solar energy isn’t being produced. Energy storage can also help the electric grid operate more efficiently because it is a fast and flexible resource that can respond quickly to changes in renewable resources’ variable output, thereby reducing wear and tear on traditional generation infrastructure resulting in less fossil fuel consumption and the associated greenhouse gas emissions.

“By embracing energy storage solutions, Massachusetts ratepayers will be able to realize hundreds of millions of dollars in benefits over the next decade while helping to unlock the true potential of clean energy for our state,” said Energy and Environmental Affairs Secretary Matthew Beaton. “Increased energy storage capacity will not only lower our state’s peak demand, but increase overall energy system efficiency, leading to lower carbon dioxide emissions.”

In order to increase storage deployment and maximize ratepayer benefits, State of Charge recommends policy changes for Commonwealth to adopt. The recommendations include encouraging regional coordination around energy storage, amending the Alternative Portfolio Standard (APS) to include all types of advanced energy storage, encouraging expanded use of energy storage in existing energy efficiency programs, considering energy storage as a utility grid modernization asset, and pairing storage with renewables in future long-term clean energy procurements, and considering standards and code development for energy storage.  The report also highlighted programmatic opportunities including rebate programs for customer-sited energy storage, solar plus storage initiatives, the continued funding of clean energy resiliency initiatives focused on energy storage for critical facilities, and continuing the MassCEC investment and technology development programs to support energy storage companies in Massachusetts.

These recommendations, if adopted, are expected to yield 600 MW of advanced energy storage technologies on the Massachusetts grid by 2025. These recommendations are anticipated to provide over $800 million in cost savings to ratepayers and approximately 350,000 metric tons reduction in GHG emissions over a 10 year time span which is equal to taking over 73,000 cars off the road.

“The growth of renewable energy resources and the retirement of large capacity generators in the region present Massachusetts with a unique opportunity to be at the forefront of the energy storage movement,” said Department of Energy Resources (DOER) Commissioner Judith Judson. “State of Charge shows that the Commonwealth can integrate energy storage to lower overall energy costs, increase grid efficiency by decreasing peak demand, and more effectively utilize our strong clean energy sector.”

“Investing in storage deployment and technology across the Commonwealth will help our Massachusetts-based energy storage companies tap a fast growing market,” said MassCEC Interim CEO Steve Pike. “The retirement of traditional energy sources like coal and increased energy demands to our grid make compelling cases for implementing cost effective energy storage here in the Commonwealth.”

Following the release of the study, DOER and MassCEC will utilize the findings to implement a grant program for energy storage demonstration projects over a range of application scales. This grant program, to be launched later this year, will utilize the remaining funds available from the $10 million Governor Baker initially budgeted for the Energy Storage Initiative. The programs funded through the grant programs will build upon the results of the use cases in State of Charge to further explore the potential benefits advances storage technologies hold for the Massachusetts energy market.

"Diversifying our energy resources to work toward a green energy future is a goal that we all share," said Senate President Stan Rosenberg (D-Amherst). “Expanding our portfolio to include energy storage will bring down costs for rate payers, increase the efficiency of renewable technology, and combat the effects of climate change.”

“Energy storage technology has great potential to improve our electric grid, both in saving ratepayers money and advancing the Commonwealth’s renewable energy goals,” said House Speaker Robert A. DeLeo (D-Winthrop). “I thank the Baker Administration for conducting this study and I look forward to seeing how the findings may compliment the energy storage provisions we included in the 2016 landmark energy law.” 

“Energy storage is key to making our grid work smarter, cleaner and more cost effectively,” said Senator Benjamin Downing (D-Pittsfield). “I am glad to see the Baker Administration recognize the potential of storage and push the envelope with this disruptive technology.”

“I applaud the administration for their forward-looking report regarding the tremendous potential storage holds for our Commonwealth’s energy future,” said Representative Thomas A. Golden, Jr. (D-Lowell), Chairman of the Joint Committee on Telecommunications, Utilities, and Energy. “Investing in storage will increase the resiliency of our grid, lower our electric bills, and provide jobs in our already nation-leading clean energy economy.”

“The development of energy storage technology and its long term deployment in the Commonwealth are critical components to energy cost reduction, system reliability, carbon footprint reduction and energy diversification,” said House Minority Leader Bradley Jones, Jr. (R-North Reading).

“Storage is an important next frontier in our quest for more renewable energy,” said Senate Minority Leader Bruce Tarr (R-Gloucester).  “We need to have a definite course of action, and the resources to support it, to make the most of electricity generated from sunlight, wind and water.”

"I was glad to work with my Senate colleagues in advancing legislation related to energy storage,” said Senator Anne Gobi (D-Spencer). “Being able to utilize existing technologies while preparing for the changing landscape in energy usage and new advances in energy storage will keep Massachusetts in the forefront in planning and addressing our current and future energy needs for our environment, communities and economy."

DOER is also beginning a robust stakeholder engagement process to solicit feedback on the study, as well as to inform the decision making process in determining whether Massachusetts should establish an energy storage procurement target ahead of the December 30, 2016 deadline set forth in the legislation. Further details on the public engagement process, including information on public listening sessions and comment periods, can be found here.

"We applaud the Baker-Polito Administration’s leadership and their comprehensive efforts to properly value energy storage in Massachusetts through this study," said Matthew Roberts, Executive Director of the Energy Storage Association. "This report demonstrates the many ways that storage enables a more flexible and resilient electric grid, while providing hundreds of millions in savings for utilities and ratepayers alike. This report sets a pathway forward for developing competitive market mechanisms that will accelerate the deployment of storage systems, and allow Massachusetts to become a driving force in grid modernization and advanced energy." 

“With this groundbreaking study, and accompanying utility energy storage procurement legislation, Massachusetts has taken the national lead in state energy storage policy. The study shows how storage can simultaneously save money, reduce greenhouse gas emissions, and provide valuable grid services, and provides a roadmap for the state to follow,” said Todd Olinsky-Paul of the Clean Energy States Alliance. “Massachusetts has dramatically raised the clean energy bar; it is now up to other states to follow the Baker administration’s example.”