Massachusetts passes bill to set energy storage targets

If the omnibus energy bill is signed by Governor Baker, Massachusetts will become the third state to mandate that utilities procure energy storage.

August 2, 2016 Christian Roselund

On Sunday, Massachusetts’ House approved an omnibus energy bill that requires utilities to procure energy storage, as well as lifting barriers to allow them to own this storage. The was previously reconciled with a Senate version, and now goes to the desk of Massachusetts Governor Charlie Baker (R), who is expected to sign it.

Under the bill the state’s Department of Energy Resources (DOER) will determine whether or not to set targets for utilities. DOER is also invited to enact policies to support the growth of energy storage, including “refinement of existing procurement methods”, use of alternative compliance payments to develop pilot programs, and the use of energy efficiency funds.

“These potential targets are a major step forward in continuing the state’s leadership on grid modernization, and ensuring that Massachusetts will build a flexible, efficient and resilient electric grid that will enhance the deployment of clean energy such as wind and solar,” noted Energy Storage Association in a statement on its website.

The legislation lays out drivers for energy storage, including reducing greenhouse gas emissions and demand for generation during periods of peak usage, deferring generation and transmission and improving grid reliability.

If approved this will make Massachusetts the third state to mandate that utilities procure energy storage, after California and Oregon. Additionally, the bill lifts a limitation that prevented utilities from owning energy storage, which had traditionally been classified as generation.

GTM Research notes that DOER has already been doing a lot of work as part of a $10 million energy storage initiative implemented by Governor Baker last year. “While we haven’t seen the output of these efforts, generally it’s been acknowledged that storage will play an important role in meeting MA’s objectives of creating a cleaner, resilient and reliable grid,” GTM Research Director of Energy Storage Ravi Manghani told pv magazine. He also says that allowing utilities to own storage clears a “key hurdle”.

Manghani notes that there has been a small frequency regulation market in New England to date, due to early implementation of federal rules by the regional grid manager. He describes the existing energy storage market in the region as “active but sporadic” and notes that there have been few top-down initiatives “until now”.

PACE, offshore wind and pipelines

The ambitious and multi-faceted bill includes a number of other measures that will affect renewable energy in Massachusetts. This includes legislation enabling PACE funding for energy efficiency improvements and solar PV installations on commercial and industrial properties, upon approval by city and town councils.

The bill also sets a target for utilities in the state to procure electricity from 1.6 GW of offshore wind by 2027. In neighboring Rhode Island, the first offshore wind farm in the United States is currently under construction, and a number of Massachusetts legislators had long expressed interest in supporting the creation of a domestic offshore wind industry.

However, environmental groups have expressed disappointment that there is no language in the bill forbidding utilities for charging ratepayers for the cost of constructing pipelines to bring gas into the state.

Update: This article was modified at 1:15 PM Eastern Time (U.S.) on August 2 by including commentary by GTM Research.

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