The Massachusetts Department of Energy Resources (DOER) has set the commonwealth’s much-anticipated energy storage target at 200 MWh to be achieved by January 1, 2020. Last week, it also issued a joint request for proposals for 400 MW of offshore wind energy.
The announcements made this week follow an energy bill signed into law by Gov. Charlie Baker (R) in August 2016, which seeks to integrate more renewables while reducing ratepayer costs and pollutant emissions.
A Focus on Energy Storage
The law, “An Act Relative to Energy Diversity,” requires each electric distribution company in the state to submit a report to DOER no later than January 2020 detailing how they have complied with the energy storage target. It also requires that electric distribution companies submit annual reports beginning in January 2018, which should include the amount of energy storage procured by each company, the cost-effectiveness of energy storage projects undertaken, how wholesale market opportunities were identified and monetized, and any recommendations for programs and policies to ensure the continued cost-effective deployment of energy storage.
“Based on lessons learned from this initial target, DOER will determine whether to set additional procurement targets beyond January 1, 2020,” the agency said in a statement on June 30.
The state released a report last September identifying potential ratepayer benefits from energy storage deployment in Massachusetts as well as a set of key recommendations to promote energy storage. Some recommendations already implemented include—for the first time in the U.S.—incentivizing the pairing of energy storage with solar in a proposed solar incentive program, pairing energy storage with offshore wind, and distributing grants and funding for energy storage projects. DOER this March also launched the second phase of the Energy Storage Initiative, which is a $10 million grant program for energy storage demonstration projects.
According to the September report, the state only had 1.4 MW of operational storage at the time—mostly lithium-ion batteries—but 4.4 MW of announced projects and 8.1 MW of proposed storage had been planned.
Battery Storage Alive and Well in Other States
According to GTM Research’s latest Energy Storage Monitor report released this June, energy storage deployments have fallen by 50% compared to last year, but it notes that this “follows the trend of the first quarter of each year generally seeing a smaller megawatt deployment level after an active fourth quarter.”
California continued its dominance over utility-scale energy storage markets, followed by Hawaii and Arizona. Lithium-ion batteries dominated the market for the 10th straight quarter, GTM noted, holding a firm 96.5% of the market in the first quarter of 2017. The remainder was comprised of vanadium flow batteries (3%) and lead acid (0.7%).
By 2022, the U.S. energy storage market is expected to be worth $3.2 billion—a tenfold increase from 2016, GTM said.
The market could see a further boost owing to incentives that are being adopted by a growing number of states. Among recent crucial front-of-the-meter policy developments, Oregon’s Public Utility Commission earlier this year issued guidelines under the 2015-enacted HB 2193, a law that requires Oregon utilities Portland General Electric and PacifiCorp to have a minimum of 5 MWh of energy storage in service by January 2020. California, which enacted a mandate in 2014, requires utilities to procure 1,325 MW of energy storage by 2020.
In June, meanwhile, Nevada’s governor signed a law incentivizing residential and grid-scale energy storage. The law also requires the state’s Public Utilities Commission to look into the benefits of energy storage procurement targets for some power companies as part of grid modernization plans. The commission is expected to make a decision in October 2018. These measures are expected to support the state’s move to increase its renewables portfolio standard to 80% by 2040.
The Offshore Haul
Massachusetts, meanwhile, is also looking to boost its offshore wind sector. The state law passed last year calls for utilities to procure 1,600 MW of offshore wind by 2027—the nation’s first such mandate. Last week, DOER issued a request for proposals for 400 MW of offshore wind energy, but it added that it may consider proposals for up to 800 MW if larger projects have higher economic benefits to ratepayers.
According to the American Wind Energy Association, companies expected to submit bids to compete for the state’s first offshore wind farm include: Avangrid Renewables and Copenhagen Infrastructure Partners, who have partnered on the proposed Vineyard Wind; DONG Energy and Eversource Energy, who have also teamed up on the proposed Bay State Wind project; and Deepwater Wind, the company that put up the nation’s first commercial offshore wind farm in Rhode Island.
Bids are due in December, and DOER is expected to announce the winning bid next summer.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)