All
Massachusetts Accelerates Clean Energy Agenda
by Ed Burke, Dennis K. Burke Inc.
In 2018, the Bay State has prioritized energy storage, doubled its renewable portfolio standard, and set the nation’s first clean peak standard. Meanwhile, the courts have reaffirmed the state’s authority to regulate greenhouse gas emissions. It’s been a busy year; here are some of the highlights.
Solar Milestone
In February, Massachusetts surpassed 2,000 megawatts of installed solar capacity through 78,646 projects across the state. Almost half of those 2,000 megawatts were installed over the past two years, which is probably why Massachusetts has ranked second in the country for total solar jobs during this time.
“With over 2,000 megawatts of solar now installed, Massachusetts continues to lead the nation in solar deployment and clean energy innovation,” said Governor Charlie Baker. “Through our next solar incentive program, SMART, and our forward-thinking solar grant programs, we look forward to doubling that amount of solar and building a sustainable and affordable clean energy future for the Commonwealth.”
Energy Storage Gains Traction
A surge in residential energy storage deployments accounts for 72 percent of all megawatt-hours added in the second quarter. The total U.S. energy storage market deployed 156 megawatt-hours in the second quarter of 2018, a 24-percent increase from the first quarter, and triple what was deployed in the second quarter of 2017, according to the latest U.S Energy Storage Monitor from the Energy Storage Association and Wood Mackenzie Power & Renewables.
State policy and regulatory action are creating opportunities in local energy storage markets. Currently there are 24 states that have some form of regulatory or legislative policy action with respect to energy storage.
The report notes that California and Hawaii currently dominate the residential market. With the Commonwealth’s recently passed Clean Energy Bill and new SMART program, Massachusetts won’t be far behind for long.
It’s worth noting that the energy storage industry is starting to experience battery supply constraints that are expected to slow the pace of growth during the second half of this year. Over the long term, Wood Mackenzie doesn’t expect battery supply to be an issue, with multiple large battery manufacturing plants opening in the early 2020s.
In 2017, there were 1,293 megawatts-hours of energy storage deployed across 5,167 systems nationwide. Wood Mackenzie expect annual deployments to accelerate rapidly over the next few years, adding an estimated 774 megawatt-hours in 2018, to a total of more than 11,700 megawatt-hours in 2023.
Community Solar Growth
Community solar continues to gain popularity. The concept lets people subscribe to solar farms and receive credit on their electricity bills for their share of the power produced. Led by Massachusetts and Minnesota, more than 300 community solar projects were installed in the first half of the year.
The SMART Program
The Solar Massachusetts Renewable Target (SMART) incentive program will provide a new and different stream of ratepayer funds to encourage solar development. Regulators at the Department of Public Utilities are in the final stages of regulatory approval for the program.
The SMART program is poised to replace market-based solar renewable energy credits (SRECs). Projects will receive tariff-based payments for 10 or 20 years depending on criteria. Massachusetts hopes to procure up to 1,600 megawatts of new solar power through the program.
Who Gets Capacity Rights?
Way back in 2009, Massachusetts gave utilities the capacity rights for net-metered solar plants. The idea was that utilities could bid the capacity rights into the wholesale market to defray cost to ratepayers. The utilities never bid any solar into the market, saying they thought it would be too risky.
The capacity rights controversy started a few years ago. Utilities assumed that they would own the capacity rights to energy storage installed as part of the SMART program, and solar developers thought they should get to keep them. In July, Massachusetts stakeholders reached a compromise on capacity rights ownership, which could clear the path for pairing solar and storage projects under the SMART program.
The Clean Energy Bill
In August, Massachusetts Governor Charlie Baker signed An Act to Advance Clean Energy into law. The compromise legislation includes plenty of wins for the clean energy industry. For the most part, the reactions to the bill were positive. There were stakeholders and policymakers who called the bill a measured step, while others criticized that it didn’t go far enough. Solar advocates were not happy that net-metering caps were not raised in the bill.
The legislation raises the renewable portfolio standard (RPS), increasing the state’s renewable energy supply by 2 percent annually from 2020 through 2029. It then reverts back to 1 percent in 2030.
How do you integrate more clean energy into the mix of power sources needed to meet peak demand? The bill establishes a clean peak standard (CPS), making Massachusetts the first in the nation imposing a minimum percentage of clean energy required to serve during peak demand hours. At the same time, it will increase deployment of energy storage necessary to dispatch clean energy during peak hours. The clean peak begins next year. The state will set the initial minimum percentage and then increase the amount by at least 0.25 percent each year.
The bill ramps up the energy storage deployment goal of 1,000 megawatt-hours by 2025. The Department of Energy Resources had previously set a goal of 200 megawatt-hours by 2020. The new goal is more in line with New York’s target of 1,500 megawatts of storage deployed by 2025. So, which state will become the energy storage industry hub in the Northeast?
The legislation also directed the Department of Energy Resources to do a study as to whether or not the state should procure an additional 1,600 megawatts of offshore wind generation by 2035.
What the bill did not do is deliver on the solar industry’s hopes of lifting the cap on the state’s net-metering policy for commercial and community solar projects (caps don’t apply to most residential systems). The caps limit how much solar electricity can be fed into the grid in various utility territories. The net-metering contracts are a key part of project financing. New projects in areas that have reached the cap only receive a wholesale market rate, just a fraction of the compensation that would have come from net metering. Three utility service areas covering large parts of the state have already hit their caps.
With all that said, most solar developers in Massachusetts would probably agree that they enjoy an unusually generous policy environment.
Courts Affirm State’s Authority
In September, the Massachusetts Supreme Judicial Court ruled that the state can enforce the greenhouse gas emissions reductions described in a 2008 law. The Global Warming Solutions Act (GWSA) requires at least an 80-percent reduction in greenhouse gas emissions by 2050, relative to 1990 levels.
A group of electricity generators sued the state last year, arguing the act’s cap on emissions was unlawful and would increase rather than decrease statewide emissions. They argued that key provisions of the GWSA didn’t apply to electric generators because they were already regulated by another provision. As for increasing emissions, it was suggested that Massachusetts plants, having their operations limited by this regulation, would make up the difference with less efficient out-of-state plants. The court rejected both of these arguments and upheld the GWSA cap regulation.
The Department of Environmental Protection directed power plants in Massachusetts to reduce carbon emissions from 9.1 million metric tons this year to less than 2 million metric tons in 2050. The court’s decision affirms that the DEP has the authority to set these limits.
Massachusetts will play a key role in the transformation of the regional electric grid to renewables. How many jobs is that? The 2017 Massachusetts Clean Energy Industry Report found that the state’s clean energy sector grew by 4 percent between 2016 and 2017, employing a total of 109,226 clean energy workers.
Related Posts
Intelligent Enhancements for Superior Performance
Posted on September 9, 2024
Efficiency for the Future
Posted on May 20, 2024
NORA Net-0 Home Update
Posted on October 6, 2023
Building Your Information Network with Propane Tank Monitors
Posted on August 11, 2023
Enter your email to receive important news and article updates.