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Massachusetts Storage Procurement Goals the Next Step in Advancing Grid Modernization

This week, Governor Baker of Massachusetts signed a comprehensive energy bill that will make the Bay State the third in the country to adopt energy storage procurement goals – a momentous day for the advancement of energy storage on the East Coast.

Massachusetts has long been a driving force in cleantech and grid modernization, and with the passage of H.4568 the state will continue its trajectory as a leading supporter of innovative energy technology. This legislation empowers the Department of Energy Resources (DOER), led by the dynamic and tactful Commissioner Judith Judson, “to set appropriate targets for electric companies to procure viable and cost-effective energy storage systems to be achieved by January 1, 2020.” This is a strong signal to businesses and investors that Massachusetts is well-positioned to serve as a hub for the global energy storage industry and provides a greater degree of market and regulatory certainty in this growing industry.

Gov Baker speaking at H.4568 bill signing.

Gov Baker speaking at H.4568 bill signing.

Massachusetts has consistently embraced clean energy policy, which is why it is endowed with a vibrant advanced energy industry. With nearly 6,500 companies, the Commonwealth has nearly 100,000 jobs tied to the clean energy sector, which has contributed more than $11 billion in economic activity to the state.  Massachusetts leads the country in investing in early stage cleantech and is ranked first in attracting early-stage investments per capita. Energy storage will be the next driving force in the state’s clean energy economy.

Indeed, the energy storage industry is accelerating rapidly. System installations grew more than 250% last year in the United States. Costs for lithium-ion batteries have declined more than 70% in the last 18 months alone. Globally, installed energy storage capacity is projected to double in 2016 and grow more than tenfold by 2025.

Energy storage systems make a more reliable and responsive electric grid possible, by enabling us to store energy when it is abundant and use it when it is needed most. Fast-responding energy storage allows us to operate the grid more efficiently, instantly balancing our ever fluctuating supply and increasingly dynamic demand. Storage systems can defer or avoid costly investments in excess system capacity and infrastructure needed to serve the Commonwealth’s growing peak loads. And storage enables customers to be partners in creating a more reliable and resilient electric grid, and means that utilities can deliver cleaner, affordable energy while saving customers and businesses money.

Energy storage makes sense for Massachusetts – and a commitment to a more flexible, efficient, and resilient electric grid will provide economic benefits today and drive the state’s clean energy economy for years to come. The state is already home to many leading energy storage companies and is one of only three such clusters in the United States.

We would like to thank Governor Baker for his leadership, and State House leaders Sen. Benjamin Downing and Rep. Thomas Golden who also recognized the immediate value of expanding energy storage adoption in Massachusetts, and the opportunity for continued growth and advancement of the state’s grid modernization goals.

I believe that Massachusetts is poised to serve as a global hub of this innovative industry. Bay State leaders have done an excellent job to date shepherding a homegrown energy storage industry, creating jobs and attracting investment from global energy leaders. This legislation codifies the state’s commitment to taking the next step in creating a more flexible, resilient electric grid that can more readily integrate renewables and deliver reliable energy at an affordable price for years to come.

Matt Roberts's picture

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Matt Roberts's picture
Matt Roberts on Aug 11, 2016 4:25 pm GMT

Looking forward to feedback and comments. Where do you think energy storage in Massachusetts is headed? How do you think storage-focused hubs can help accelerate deployment of energy storage systems?

Bob Meinetz's picture
Bob Meinetz on Aug 12, 2016 7:11 am GMT

Well Matt, since you asked –

There is no evidence, of which I’m aware, which shows storage on a grid increases net efficiency of generation over meeting demand directly. It is indisputably handy for smoothing grid transients and voltage/frequency stabilization. Do the energy savings in those applications outweigh the 5-10% losses in electrochemical resistance which inevitably result from stuffing energy into a battery and pulling it out again hours later? Sounds like a net loss, to me.

That has a direct effect on emissions. If we’re storing energy from the grid (or worse, directly from a fossil fuel “natural gas” plant) it’s becoming 5-10% dirtier during the round trip to the battery and back.

Batteries may help avoid the need for purchasing expensive electricity during peak demand, to compensate for unpredictable drops in intermittent renewable energy. Though during those times they can make the system marginally more efficient, the real purpose is to make the utility and its shareholders more money by saving the capital cost outlay of building plants to meet customer demand.

You can skip all these problems by getting rid of the renewables and generating all your customers’ electricity with a modern nuke plant, which is perfectly capable of load-following customer demand (a function distinct from supply-leveling). No resistance losses, and 100% clean.

So – there seems to be a foregone conclusion that storage is beneficial for the public, and not just to help the utility make more money at the expense of environment. What’s the basis for that conclusion?

Nathan Wilson's picture
Nathan Wilson on Aug 12, 2016 1:50 pm GMT

Energy storage makes sense for Massachusetts…

Well, if you can develop storage into an export industry, then sure. But with fossil gas being the dominant electricity supplier, the Massachusetts grid should not need storage for reliable operation. Unlike areas with desert solar power, a few hour of storage cannot turn Massachusetts’ renewables into firm generation; they will still need full fossil backup. One of the fundamental premises of the EPA’s clean power plan is that all of the old-fashioned inflexible gas boiler type power plants should be replaced with modern more efficient (and fast-responding) combined cycle plants.

But of course the more important issue is that current green politics is merely acting as a distraction to divert attention away from the fact that Massachusetts’ electricity is getting dirtier as the Pilgrim nuclear plant, which supplies about 14% of Massachusetts’ electricity, is being replaced by increased use of fossil fuel. The structure of deregulated markets, with it’s focus on short-term benefits, inherently favors fossil fuel. So without clear policy support (which as New York is finding out, can be just a small fraction of that lavished upon renewables), the benefits of our long lasting nuclear plants, build by our parents, will be denied to our children. Any batteries or renewables we build today will be scrap in twenty years, leaving our children none of the long lived clean energy infrastructure that our parents gave us.

The focus of Massachusetts energy policy should not be on storage, but on preserving and expanding the existing nuclear capacity, and replacing it’s heating oil based home heating system with a modern district heat system. Hot water based district heat is the cleanest and safest way to heat homes, since it can utilize the waste heat from thermal power plants, and doesn’t not involve any combustion, exhaust, or CO2 emissions within the home; also, hot water is much cheaper to store than electricity, so it does not present strong demand spikes on the distribution grid as electric heat pumps do. District heat is an important part of the infrastructure that we will need in our low CO2 emitting future.

Matt Roberts's picture
Matt Roberts on Aug 13, 2016 12:37 am GMT

Hi Bob – thanks for the feedback and sharing ideas. The undelying idea in your first point is correct, that the most efficient way to meet demand is directly through generation (opreferably as close to the source as possible to prevent line losses) – but our system is incredibly dynamic, and no longer that hub and spoke design of the 70’s and 80’s. Both load and generation are in constant flux, and one of the roles that storage plays is to allow generation to operate at maximum efficiency/best heat rate, while allowing faster-responding and more efficient storage systems (and demand response, etc.) to address fluctuations on the grid. This has both energy savings benefits, and improves the performance of all types of generation by allowing them to do what they do best, deliver electrons, instead of chasing grid signals.

As one example, PJM has seen substantial reductions in demand by creating a RegD, fast-responding grid signal due to both the speed and accuracy of storage systems. This not only saves millions in expenses each year in operating the grid, but also helps to improve the heat rate of other generation (which see reductions in performance as you throttle them down). Having the ability to cost-effectively store energy on the grid provides systemic value, and allows us to both plan and operate the grid in fundamentally different ways.

Additionally, cutting down on those emissions sources provides opportunities to improve air quality and a measurable impact on public health.

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