New State Energy Storage Target Falls Short
by Tim Cronin, Policy Fellow [image: Wikimedia]
A new energy storage target released last week by state regulators falls short of meeting the state’s current and future clean energy needs. The target, expected since December 2016, asks electric distribution companies to implement a modest 200 MWh storage procurement target by January 2020. This relatively low target, and its non-binding nature, portray a surprising lack of leadership by Massachusetts and a willingness to forgo the full economic benefits of an effective clean energy storage policy in favor of the status quo.
Energy storage is critical to the long term viability and development of renewable energy.
First, renewable resources like wind and solar are susceptible to natural fluctuations. Intermittency can be solved by storing excess energy in batteries, making renewables much more economic and competitive with traditional energy sources.
Second, storage can help “smooth out” the grid when excess amounts of energy are generated, solving many utility companies’ supply-demand challenges. Locally, expanding energy storage capacity has the potential to translate into hundreds of millions of dollars of annual electricity savings for households and local businesses in Massachusetts.
Historically, there has been little incentive for electric distribution companies to increase energy storage capacity fast enough to keep up with rising demand for renewables. Without sufficient storage the state’s electric grid is susceptible to shortages, which encourages utilities to use dirty alternatives to clean energy, like natural gas. This was the problem identified by the MA Energy Storage Initiative’s (ESI) 2016 “State of Charge” report, which specifically advocated for a statewide target to be used as an incentive for utilities to increase their energy storage capacity.
The current plan, announced by Governor Baker’s Department of Energy Resources (DOER), asks electric utilities to reach an “aspirational” 200 MWh energy storage procurement target by January 2020. But there are a number of issues with this plan. First, the target is non-binding (i.e. “aspirational”), meaning there are no legal consequences if utilities fail to meet the procurement target. Second, the target is relatively modest, especially compared to ones other states have adopted and proposed. Third, the majority of the 200 MWh target will be met with existing clean energy procurement methods, leaving little incentive for actual energy storage innovation between now and 2020.
A better alternative to Governor Baker’s energy storage policy can be found in California. The first state to adopt such a target, California has ambitiously implemented a massive 1.35 GW mandate and has ensured it is binding on all utility companies. A similar large and binding mandate, modeled on California’s, would benefit Massachusetts by sending a market signal to attract investment and innovation in energy storage.
With the target officially announced by the administration last week, there is little chance that Governor Baker will consider increasing it before 2020. But there is still a window of opportunity for policymakers to strengthen energy storage procurement in the state. In the meantime lawmakers can support Rep. Thomas Golden’s (D-Lowell) bill that establishes new tax exemptions for some storage systems (H.2600) and other legislative efforts to encourage energy storage. It’s through such action that Massachusetts can reassert itself as a national leader in clean energy, expand affordable energy access for local businesses and households, and claim a significant victory in the fight against global climate change.
To learn more about the state’s energy storage target and how we can ensure increasing investment is targeted towards community resiliency, join the Climate Action Business Association for a panel discussion on July 20th. Click here to register.
About the author: Tim is an economics and politics student at Stonehill College. This past year he had the opportunity to study at Oxford University, exploring global governance, human rights law, and int’l economics. As a senior, Tim will serve as student-body president and continue to fight for sustainable initiatives such as fossil fuel divestment and expanding the college’s solar farm. He has interned at the State House and serves on the board of his local civic association. Tim enjoys reading The Economist, listening to podcasts, and exploring state parks in his free time.