NEWS: Distributed energy resources, Energy and environmental policy, Renewables
E3 Study Findings and Recommendations Inform Massachusetts Energy Storage Targets

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January 23, 2024

Last week, Massachusetts Governor Maura Healey presented her State of the Commonwealth address which highlighted the state’s ambition to become “the climate innovation lab for the world.” To this end, Governor Healey announced that “clean energy will power not only our homes and cars – it will power opportunity and equity for workers in every part of this state.” Aligned with this announcement, the Massachusetts Clean Energy Center (MassCEC) and Department of Energy Resources (DOER) released Charging Forward: Energy Storage in a Net Zero Commonwealth, a study conducted by E3 in collaboration with MassCEC and DOER. An update to the Massachusetts 2016 State of Charge report, Charging Forward assesses the current state of energy storage in the Commonwealth, the market outlook for emerging mid- and long-duration storage (LDES) technologies, and potential applications of mid- and long-duration storage, all in the context of providing benefits to ratepayers and achieving the state’s ambitious decarbonization goals.

The study included several modeling and stakeholder engagement elements. Leveraging E3’s pro forma financial model of storage technology costs and a custom-built storage dispatch model, the project team analyzed several storage use cases to help the state understand impacts of current incentive programs. The E3 team also examined reforms to incentive programs that would be most effective for developers, ratepayers, and the state. Assessment of future storage value involved loss-of-load probability modeling of the entire ISO-NE footprint using E3’s RECAP model. This assessment predicts the reliability value of long-duration storage to the system and how this value will depend on the rest of the generation portfolio, particularly the quantity of offshore wind. E3 engaged stakeholders throughout the study process through interviews with more than 50 key stakeholders and two public stakeholder workshops. The study culminated in the Charging Forward study written by E3 and an accompanying report written by DOER with E3’s consultation. 

In the study, E3 shows that the role of energy storage changes to suit grid needs: providing ancillary services, arbitraging prices to match otherwise curtailed renewable generation to load, providing reliable capacity in a deeply decarbonized system, and in select cases improving local resilience. In spite of these many use cases, the value of storage today is limited, but it will grow as renewable penetration increases, producing more volatile energy prices and marginal emissions rates, leading to more revenue for storage operators, ratepayer savings, and lower emissions from the electric sector. Alongside this increasing value, storage costs for all durations are expected to continue to decline through innovation and “learning by doing”. Longer storage durations will be valuable in providing capacity as the New England grid shifts to become a winter peaking system with possible multiday periods of high electrified heating need and low renewable production. The ability of storage to provide firm capacity during such periods depends strongly on the rest of the renewable portfolio, in particular on the deployment of offshore wind.

To better position the Commonwealth for efficient deployment of energy storage as part of Net Zero electric grid goals, E3 lays out a series of policy recommendations based on this analysis and experience across North America. These recommendations focus on incentives for near-term storage deployment that can bridge the gap to long-term, market-supported and societally valuable use cases. Recommendations for state incentive programs include better alignment of programs signals with grid needs; mechanisms to improve revenue certainty and spur deployment; state action to motivate deployment of storage that is not being built today but can provide societal benefits now or in the near future; and a focus on benefits to low-income and energy justice communities. We also include recommendations to support energy storage market development including improved coordination among the state, developers, and utilities for data/information sharing and project identification; engagement with local environmental justice communities for transparent and collective decision-making around brownfield site development; and streamlining of guidance on siting and permitting to lower barriers for developers, municipalities, businesses, and homeowners.

E3 would like to thank our study collaborators, MassCEC and DOER, for their partnership in this study. We would also like to highlight our own study contributors for their hard work and creative thinking throughout the study process: Liz Mettetal, Andrew DeBenedictis, Nate Grady, Ruoshui Li, Pedro de Vasconcellos Oporto, Sophia Greszczuk, Charlie Gulian, and Kush Patel.

filed under: Distributed energy resources, Energy and environmental policy, Renewables