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Massachusetts Breaks Policy Ground on the East Coast with Energy Storage Target

On June 30, the Massachusetts Department of Energy Resources (DOER) announced a statewide target of 200MWh of advanced energy storage by 2020, making the Commonwealth the third state in the nation to set a capacity target on energy storage, and the first to do so on the East Coast. The announcement is an outgrowth of an omnibus law passed last August by the Baker Administration, which also calls for long-term contracts for 1,600MW of offshore wind power and 1,200MW of hydropower.

The 200MWh storage target builds upon the state’s Energy Storage Initiative (ESI), which was launched in 2015 by the Baker Administration with goals of promoting and accelerating the development of storage companies in Massachusetts, as well as expanding storage markets and developing policies to support the growth of energy storage in the state. Last year ESI commissioned an exploratory storage study, “The State of Charge,” which recommended an advanced energy storage target of 600MW in the state by 2025, a figure it claimed would save Massachusetts ratepayers more than $800 million in savings over a 10-year period. Currently, the state has just a few megawatts of storage implemented, with no commercial scale deployments, but will see rapid deployments and ramp-up leading up to the January 1, 2020 deadline to report back to DOER.  

In the past few weeks, there has been some buzz between industry players and analysts on the discrepancy between the report recommendations and target announcement, but it’s important to note the difference in timeframe juxtaposed against the significant cost reductions projected in the study that will accelerate storage implementation with time. DOER Commissioner Judith Judson has also expressed that the target should be viewed as one step in part of a larger and more comprehensive plan. That ecosystem includes the state’s Solar Massachusetts Renewable Target (SMART) program, the first in the country to incentivize the pairing of storage and solar, its Community Clean Energy Resiliency Initiative, which backs municipal resilience clean energy solutions with $40 million in grants, as well as the additional $10 million in funding the state will offer for energy demonstration projects that align with the findings of the State of Charge report.

Sparking East Coast Storage Momentum

Currently, California and Oregon are the only two other states in the nation with energy storage capacity targets: 1.3GW for California and 5MW per utility in Oregon. Currently New York Governor Andrew Cuomo has legislation awaiting his signature that would have the Empire State join Massachusetts as another key East Coast player in advancing storage development and deployment.

Flexibility, Load Leveling, and Peak Shaving

Storage is a key piece of the future grid puzzle, providing flexibility and redundancy to existing grid resources. And particularly as more distributed and intermittent resources come online, like solar and wind, the importance of energy storage will grow, as it’s essential to maximizing how the energy generated from these resources is managed within the grid.

In the earlier part of the decade, industry stakeholders questioned the viability of storage as a commercial scale investment; however, cost reductions and R&D advancements have progressed, and utilities like Southern California Edison played an instrumental role in demonstrating value as early movers on several hundreds of megawatts in capacity a few years back, proving in the process that storage could be competitive to traditional generation across several metrics, including cost. Actual materials and technology used within storage solutions aside, the concept and value to the grid—modularly deployed, flexible reserves of energy that can be filled or withdrawn on demand—is a future-proof capability needed regardless of the original generation source of those electrons. As a consequence, storage is on the lips of almost every utility executive in the country today who’s pursuing modernization initiatives, whether voluntarily or through government nudge.

The graphic below is a good visual representation of how storage will help to level the daily load demand, using early morning generation as storage to be used during peak demand times later in the day.   

Source: MA Department of Energy Resources and Mass Clean Energy Center

How Greentown Labs Can Support Massachusetts Leadership in Energy Storage

While there may be debate about the target’s ambition, the market signal that the state is sending with this announcement is clear: Massachusetts’ commitment to the integration of renewable energy sources and deployment of grid modernization technologies will continue to attract private investment and fuel job growth in the Bay State.

We at Greentown Labs look forward to helping Massachusetts achieve this target through our continued role in supporting startups focused on developing energy storage technologies. We’ll also continue to serve as a hub for all stakeholders to convene and discuss the financial and strategic initiatives necessary to achieve these energy goals of 2020 and beyond, and further the state’s leadership in cleantech innovation.

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