Regulation, Sourcing Renewables - March 27, 2020
Massachusetts finalizes Clean Peak Energy Standard program
The Massachusetts Department of Energy Resources filed March 20 finalized regulations for implementing the state’s Clean Peak Energy Standard, the first of its kind in the nation.
The program provides incentives to clean energy technologies that can supply electricity or reduce demand during seasonal peak demand periods, Utility Dive reported. Gov. Charlie Baker’s office filed the regulation with the state legislature’s Joint Committee on Telecommunications, Utilities and Energy to begin a formal review process.
The CPES is estimated to reduce carbon emissions but 560,000 metric tons in the first ten years and provide savings of nearly $400 million in the first decade. The CPES certificates would be issued to new renewables; existing renewables that pair with new energy storage; new energy storage that charges primarily from renewables; and demand response resources. The certificates could then be sold to retail electricity suppliers, who would be required to purchase at least 1.5% each year to meet the minimum obligation.
The program has received some pushback from utilities because of how it would raise rates. National Grid estimates that over the next decade it will cost the average customer about $40 annually, but the Energy Storage Association expects the program to reduce infrastructure costs for ratepayers by $710 million over the next decade. Under the program, ratepayer costs would be capped at $0.005/kWh.
"The finalized regulations announced by DOER are an encouraging basis for energy storage companies to invest further in Massachusetts," ESA said in a statement.
However, National Grid is overall supportive of this measure and just advocates a few alterations.
The program is now under a 30-day review period, after which it will move through the state before being published. The application portal for the program is scheduled to go live in July and the first CPES certificates will be generated in January 2021.