What’s Next for Energy Storage Policy? Watch Massachusetts

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The bellwether state of Massachusetts often serves as a focal point of energy innovation. Now it has set its sights on energy storage policy.

energy storage policy

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Over the last few months local and national energy players of various ilk – utility, competitive market, microgrid, distributed energy, renewables, environmental and social justice – have honed in on the state.

Their interest comes as Massachusetts gets ready to set a target for energy storage development that utilities and possibly other electricity providers would be required to meet. Late last month Judith Judson, state energy commissioner, took the next legal step in determining an energy storage target would be ‘prudent.’

Now the state is seeking comments by January 27 on a variety of issues associated with the target, including whether to strive for 600 MW of energy storage — the amount recommended in a state report issued in September — or another target.

The state plans to set the target in July. It also intends to issue a request for proposals offering $10 to $20 million in energy storage grants at a yet to be determined date.

Industry players already have had plenty to say about what’s ahead. Several filed comments last month with the Department of Energy Resources. Some of them have been working in California, the lead state on energy storage policy. They want to bring lessons learned in California to Massachusetts.

Here’s a sampling of what various, sometimes opposing, industry players said Massachusetts should do about energy storage policy.

Utilities on energy storage policy

Utilities are taking a customarily careful approach. Comments filed by Eversource, National Grid and Unitil pushed for aspirational, rather than mandatory targets that carry penalties if the goal isn’t met. They described energy storage as a “nascent technology” and urged that targets reflect manufacturing and development capabilities.

The utilities want to own energy storage – something a recently passed law allows, although not all parties support.

In determining what can be counted toward the target, they recommended the state accept both utility-owned storage and customer-owned systems, such as those supported by demand response or other utility programs. Existing and future projects would count, under the utilities proposal.

The utilities also called for regulators to use the state’s alternative portfolio standard (APS) to help foster energy storage development. Under the current APS, utilities must secure a certain amount of power each year from designated technologies: combined heat and power, flywheel storage, coal gasification, or efficient steam technologies. The utilities recommended that more energy storage technologies (beyond flywheels) be included.

The utilities were generally bullish on the future of energy storage, saying they expect to see it “broadly deployed on their electric distribution networks.”

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Massachusetts utilities already are moving forward on energy storage. National Grid is in the process of interconnecting three energy storage systems that it owns. National Grid also plans to issue a request for proposals for an additional 7 MW to be installed at targeted locations during 2017 (DPU 16-104).

Eversource intends to develop up to 40 MW/200 MWh of grid-connected energy storage through 2022. The utility expects about 10 MW of the capacity to be installed by 2020.

In addition, Eversource has a solicitation underway for energy storage demonstration projects for commercial and industrial (C&I) customers. The utility expects to install 3.56 to 5.33 MW of advanced battery storage, and 0.38 to 8.53 MW of thermal storage through the solicitation.

With an eye toward testing out more than one business model, Eversource says it will select multiple battery storage vendors. For thermal storage, the utility plans to test both ice storage and phase change materials.

In a petition now before the Massachusetts Department of Public Utilities (DPU), Eversource seeks $21.5 million to fund the C&I projects, which also include controls and software and demand response. The company has budgeted $5 million for the batteries, $3.9 million for thermal storage, $4.1 million for the software and controls, and $5.2 million for demand response. Everource foresees 975 to 1,695 customers participating to achieve peak savings of 5,475 – 12,714 MWh.

A hearing on the C&I proposal is scheduled for Jan. 11. (D.P.U. 16-178.)

Separately, the Edison Electric Institute, which represents investor-owned utilities, said that energy storage is a “game changing resource that has the potential to help the grid become more reliable, flexible, and resilient.” However, the organization cautioned that if not thought out carefully, energy storage “could just as easily become part of those problems adding unnecessary costs, redundancies and idle capacity to the system.”

EEI recommended that the targets be voluntary. As such, they could help drive specific state policy initiatives and help provide a clear path for the industry to gain experience. A mandatory target, however, “can actually be detrimental and potentially result in the procurement of unnecessarily costly resources,” EEI said.

Energy storage and microgrid companies

Massachusetts-based NEC Energy Solutions pointed out that Massachusetts could see a pause in the amount of renewable generation added unless it incorporates energy storage. Energy storage balances out the intermittency of renewables. When a cloud passes over the sun for example, a battery can supply power.

“This is an issue that has plagued regulators in Hawaii, who did not implement a storage mandate while encouraging the addition of solar to the grid,” NEC said.

The company provided 2 MW/3.9MWh battery energy storage for a municipal microgrid built in Sterling, Mass. The project is designed to overcome intermittency problems the town faces because of its relatively large amount of solar wattage.

The microgrid will provide energy resiliency for critical town departments such as police, dispatch, and fire service. By reducing peak demand, the project also takes aim at cutting Sterling’s transmission capacity charges. The Mass DOER provided partial funding in the form of a $1.46 million grant.

NEC Energy Solutions described energy storage as an alternative to the inefficiencies of our current approach of building power plants to meet peak demand. To underscore just how unwieldly this approach is, NEC described today’s grid design as “akin to building an enormous highway with enough lanes to accommodate all rush hour traffic on the worst day of the year. This would largely be seen as a waste of money and result in under-utilized roads, however, this is how the grid is built today.”

SolarCity/Tesla said that a target would help Massachusetts overcome several market barriers to energy storage. These barriers include rate structures that prevent most customers from reaping the economic benefits of energy storage. Progress will be too slow if the state continues to rely on pilot programs and demonstration projects, the companies said.

The companies called for Massachusetts to adopt energy storage policy to procure both behind-the-meter and in-front-of-the-meter energy storage that supports both the distribution and transmission system. Similar energy storage policy in California stimulated economic development and local jobs, attracting software developers, hardware manufacturers, project developers, finance companies and others, according to SolarCity/Tesla.

SolarCity/Tesla also urged the state to ensure that the target acts as a minimum level of energy storage, not a cap.

Three big energy storage players, Advanced Microgrids, Green Charge Networks and Stem, said that a target will help scale energy storage and drive down costs.

The companies, which say they account for more than 80 percent of behind-the-meter storage in the U.S., estimate that the Massachusetts target could draw investments of $20 million in energy storage its first few years. Commercial and industrial customers could save as much as 15 percent on their energy bill by using energy storage to reduce peak demand, according to the companies.

They called for Massachusetts to set energy storage policy with a target that applies to both customer and grid storage systems. The companies see value in requiring that investor-owned utilities meet the target, along with other electric suppliers, like municipal utilities.

Advocacy Groups

Photo by momojung/Shutterstock.com

Clean Energy Group, a clean tech policy non-profit, championed the idea of requiring that utilities meet an energy storage target – but said utilities should be limited in how much of that storage they can actually own.

“A main concern is that utilities should not use their considerable market advantages to discourage or even prevent third-party or customer-owned energy storage from entering the Massachusetts market,” said CEG.

The organization recommended that the state instead look to a model offered by California, which caps the amount of energy storage a utility can own.

Any energy storage a utility does own should serve a societal purpose beyond just reduction in energy costs, CEG said. Specifically, CEG recommended that 10 percent of utility-owned storage be used for low-income housing. The organization recently demonstrated one way such programs might work with a low-income solar plus storage microgrid project in Vermont.

CEG also called for energy storage to promote other social benefits, including resiliency, public health (displacing fossil fuel peaker plants), replace retiring power plants and colocation with renewables.

The Energy Storage Association said that the target should incorporate storage into routine electric system planning, procurement, and operations.

The current regulatory framework doesn’t fully recognize the value of advanced energy storage, despite its potential to lower costs and improve the quality of electric service, according to ESA.

The organization noted several benefits energy storage can bring to New England, including fast-response dispatch time. In the nearby mid-Atlantic states, grid operator PJM found that it could reduce the reserves required for effective grid frequency regulation by 30 percent through fast-responding resources like energy storage, ESA said.

ESA also noted the growing use of energy storage in many other states including California, Connecticut, New York Arizona, Washington, Hawaii, Texas and Utah.

The Conservation Law Foundation (CLF) said that an energy storage target will help the state meet its greenhouse gas reduction goals. Under state law, Massachusetts must reduce greenhouse gases 25 percent statewide from utilities, industry, transportation and other sources by 2020.

CLF said that deploying 1,766 MW of energy storage by 2020 would reduce greenhouse gases by at least 1.06 million metric tons of carbon dioxide equivalent (MMtCO2e) over a ten-year period.

The ability to reduce emissions cost-effectively — and in time to help the state meet its greenhouse gas mandate — “counsels strongly in favor of DOER setting a mandatory 2020 procurement target, rather than simply encouraging demonstration or pilot projects,” CLF said.

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About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than three decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.


  1. For some reason it seems like the utility companies are trying to corner the market on renewable energy? Like citizens can’t get out of the grasp of corporations lol we were looking at using some area of our storage lot for renewable energy and it’ll likely be more hassle than worth.


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