Already a promising microgrid market, Massachusetts could get even better should new bills pass that promote non-wires alternatives, grid modernization, energy storage, and green and local energy.
The Alliance for Clean Energy Solutions (ACES), a coalition of environmental and industry groups, discussed the bill and its other legislative priorities in an interview Monday, as it prepares for energy hearings at the state capitol this week.
“The appetite for local energy and microgrids continues to grow in Massachusetts because of declining costs for solar, progress on energy efficiency, and the attention the Baker administration has given to energy storage,” said Peter Shattuck, Massachusetts director for the Acadia Center and ACES co-chair.
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The various bills focus on identifying non-wires alternatives, setting energy storage targets, expanding the renewable portfolio standard, removing solar net metering caps, creating clean energy financing, and establishing incentive rates for electric vehicle charging.
For microgrids, one of the most significant bills requires that utilities install non-wires alternatives where they prove less expensive than conventional approaches. Also called local energy resources, non-wires alternatives are built in lieu of centralized infrastructure, such as power plants, substations and transmission and distribution. Utilities would competitively procure the non-wires alternatives – microgrids, solar plus storage, demand response or other forms of distributed energy.
The non-wires alternatives proposal is within a new grid modernization bill, H. 1725/S. 1875, that would “reset” a proceeding now before the state Department of Public Utilities, Shattuck said. The legislation puts greater emphasis on modernizing the grid via local energy than does the existing grid modernization docket.
The bill borrows from a successful approach used for energy efficiency in Massachusetts, where a stakeholder board participates in utility planning. In this case, a seven-member board would include state officials and advocates for the environment, business, technology and consumers.
Should the legislation become law, utilities would competitively procure non-wires alternatives, as well as take several other steps to foster distributed energy. For example, utilities would create publicly accessible ‘hosting maps’ with information about interconnections where opportunities present themselves for non-wires alternatives. Utilities also would identify or develop incentives for local energy.
In turn, the utilities would be eligible for possible performance incentives, as well as pre-authorization for grid modernization spending. Pre-authorization helps diminish the risk of utilities being denied cost recovery by regulators after they’ve already made the investment.
Plans for New England-wide non-wires alternatives
Sponsored by Rep. Jennifer Benson and Sen. Marc Pacheco, both Democrats, the bill also looks beyond Massachusetts by considering the New England-wide impact of non-wires alternatives. New England already has used such multi-state planning for securing transmission and renewables. In this case, Massachusetts would bring a local energy project to other states if it determines that the project lowers costs regionally, but not for Massachusetts in particular. The state would seek an agreement among the states for joint payment of the project.
The local energy resources bill is now before the legislature’s Joint Committee on Telecommunications, Utilities and Energy, and is expected to be taken up in the fall.
Another bill builds upon the state’s already aggressive plans for energy storage. Energy storage legislation signed last year by Gov. Charlie Baker, a Republican, led to a decision by the state to set a target to install a specified amount of energy storage by 2020. The state Department of Energy Resources (DOER) is expected to announce the exact figure by July 1. The new bill (H. 1746/S. 1874) would require that the state also set energy storage targets for 2025 and 2030.
Also sponsored by Sen. Pacheco, as well as Rep. Patricia Haddad, a Democrat, the legislation requires that before December 31, 2018, the DOER set a statewide goal to deploy 1,766 MW of energy storage by January 1, 2025. Then by December 31, 2020, the state would set another target, this one unspecified, to be achieved by 2030.
The energy storage bill also opens the door to creating ‘alternative compliance payments,’ a kind of penalty charged if utilities and retail suppliers fail to make the target. The state now applies similar penalties for failure to meet renewable energy portfolio standards. The money collected goes back into programs to develop green energy.
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More behind-the-meter storage
At the same time, the bill would limit how much energy storage a utility or retail supplier could own. Shattuck said that the legislation places emphasis on securing more behind-the-meter – as opposed to utility-scale – energy storage than did last year’s energy storage bill.
“We’re glad to see utilities entering the energy storage market. Eversource, in their rate case, has a significant $100 million of storage proposed across four projects. But there is a clearly a big market for behind the meter storage as well,” Shattuck said.
Research by the Vermont-based Clean Energy Group indicates that last year’s state report, “State of Charge,” may have underestimated the potential for cost-effective behind-the-meter storage in Massachusetts. Clean Energy Group found that the state based its estimate on demand charges within National Grid’s service territory, which are lower than demand charges for the other major utility in the state, Eversource, he said. Demand charges are pertinent because commercial and industrial utility customers employ storage to reduce the charges.
The energy storage bill is scheduled for a hearing today before Joint Committee on Telecommunications, Utilities and Energy.
Among the several green energy proposals, ACES’s top priority for this year is a bill that increases the renewable portfolio standard (RPS) to 40-50 percent by 2030, with annual increases running two to three percent after that. The state’s current RPS requires that 12 percent of electricity come from renewables this year, rising to 15 percent by 2020. RPS requirements benefit microgrids because they create a revenue stream – renewable energy credits – for green energy development. New microgrids often include renewables, solar in particular.
“Given the federal government’s retrograde energy policies, it’s critical that states show a willingness to embrace clean energy solutions,” said Shattuck. “We’re proud of the direction our ACES members have taken in ensuring that Massachusetts remain a leader in the nation’s clean energy future.”
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