MA Energy Bill Diversifies into Offshore Wind, Hydro and Storage
Massachusetts’ new energy bill is an expansive approach to diversifying the state’s energy sources away from natural gas (H. 4568). This bill, which passed on Aug. 8, helps the state achieve its target of cutting emissions by 25 percent below 1990 levels by 2020. This goal is part of the 2008 Global Warming Solutions Act.
The bill requires utilities to contract 1,600 MW of offshore wind, 1,200 MW of hydroelectric power imports, and other Class I renewables (including wind and solar). It emphasizes baseload renewable generation from imported hydroelectric power and offshore wind. It promotes a more flexible grid. This involves pairing distributed generation with storage. It also encourages energy efficiency for commercial facilities.
The law also allows renewables to be paired with energy storage technology. This can allow customers to store and discharge energy as needed during times of peak demand.
Offshore Wind
The bill helps to accelerate offshore wind development by calling for utilities to solicit 15-to-20-year contracts with offshore wind projects by the end of July 2027. Offshore wind projects must be over 400 MW. They must also be in commercial operation after January 2018.
There are indications that project developers are ready to participate. Currently, three companies hold federal leases for offshore wind development in Massachusetts. These companies have signed a letter of intent at a marine terminal. This terminal can be used for wind power staging and development.
Imported Hydropower
According to the bill, imported hydroelectric power into Massachusetts is capped at 9.45 million MWh per year. The Canadian utility Hydro Quebec, which is currently involved with new transmission projects to export hydropower into New England, might supply some of this energy.
Energy Storage and Grid Modernization
Energy storage solves two problems. It addresses an increase in variable outputs from renewables. It also alleviates peaking issues in New England. This requires additional infrastructure and expensive generation.
Facilities owned by utilities, generators and customers could participate in storing or discharging energy. This makes it unnecessary for them to purchase more generation for peak demand.
The Department of Energy Resources (DOER) will determine before Dec. 31 whether there needs to be a target for energy storage.
Before this energy bill passed, Baker launched a $10 million Energy Storage Initiative (ESI) in February 2016. ESI will investigate pathways and benefits to increasing storage in the state. In addition to policy assessment, ESI will also fund pilot demonstration projects and market signals assessments.
In September, the DOER and Massachusetts Clean Energy Center (MassCEC) released the “State of Charge: Massachusetts Energy Storage Initiative” report indicating policy pathways to jump start energy storage investments.
DOER Commissioner Judith Judson said, “’State of Charge’ clearly shows that energy storage has the potential to be a game-changer for the Massachusetts energy market, offering reliability, flexibility and efficiency of usage.”
The electric grid has the opportunity to modernize with an increase in use of renewable energy, deployment of grid-scale storage, and retirement of old generation.
According to the report, New England expects 6,000 MW of generation at risk of retirement by 2020. This is in addition to the planned 4,200 MW that the region will shut down by 2019.
This retirement allows for baseload renewables – offshore wind and imported hydroelectric power – coupled with distributed generation to improve the flexibility of the grid. It can potentially reduce needs for expensive new generation during peak demand.
“The growth of renewable energy resources and the retirement of large capacity generators in the region present Massachusetts with a unique opportunity to be at the forefront of the energy storage movement,” Judson said.
Commercial PACE
The bill created a commercial property assessed clean energy (PACE) program to help finance energy efficiency or other clean energy technologies. A commercial or industrial property can qualify for the program if it conducts energy audits, renewable energy-feasibility studies, and measurement and verification of energy efficiency effectiveness.
An agency must approve the PACE project and can issue PACE bonds for financing the installation costs. The property owner can pay them back through an additional charge on their property taxes.
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