Gov. Charlie Baker has introduced a bill to use more clean
energy during Massachusetts’ hours of peak grid demand.
The governor included language in a proposed bill to allocate $1.4 billion toward climate
adaptation and environmental stewardship. The so-called Clean Peak Standard
would require a minimum level of clean energy to supply the most expensive 10
percent of grid hours each year.
The policy would compliment the state’s broader renewable
generation goals and ensure that clean energy goes to work at the times when
capacity is most valuable. It would likely require the addition of energy storage
to make intermittent wind and solar dispatchable on demand.
The Massachusetts proposal echoes a law in California and a proposed clean
energy overhaul in Arizona. It tackles the key cost driver for
utilities in the coming decades: creeping peak power demand, which would
traditionally drive buildout of natural gas plants.
In Massachusetts, the challenge is particularly pronounced:
10 percent of hours in the year contribute around 40 percent of the energy
costs that ratepayers must cover, said Patrick Woodcock, assistant secretary of
energy.
“We’ve had a long history with the renewable portfolio
standard in Massachusetts and that has worked well in encouraging and providing
incentives to increase renewables,” he said. “Increasingly, it is very
important when we dispatch these resources.”
The bill empowers the Department of Energy Resources to
identify which time periods to consider for the clean peak and how much energy
during those hours must come from clean sources. The hours in question must
contribute “a significant increase in greenhouse gas emissions, or an increase
in electrical prices or transmission and distribution costs to end-use
electricity customers of the commonwealth.”
Now that the governor has proposed the legislation, it must
work its way through the House and Senate, which have been working on their own
climate adaptation and energy bills.
“When designed correctly, clean peak standards can have real
benefits in meeting energy demand with clean energy,” said Michael Green,
executive director of Boston-based Climate Action Business Association.
Green added that he wants to see language that won't lead to
additional natural gas consumption, but will drive investment toward clean
technologies like storage and microgrids. The text currently leaves it up to
DOER to define what qualifies as a clean peak resource, “including, but not
limited to” renewables, storage and demand response.
State clean energy policy historically focused on total
megawatt-hours produced in a year by wind and solar resources. Markets that
increased their share of renewable generation have had to turn to flexible
resources to keep the grid balanced when renewables drop off.
That usually means gas plants, but in the last two years
energy storage technology has proven itself competitive.
When the Aliso Canyon gas leak left southern California
without reliable peak capacity, the state fast-tracked a storage procurement
that delivered close to 100 megawatts in 2016 across several dense, urban
communities. Storage developers responded with speed that would be impossible
with new gas plants.
More recently, bids for Xcel Energy's all-source
solicitation shattered
records for cheap projects combining renewable generation and storage.
Last month, Arizona Public Service contracted with First
Solar for peak power delivery from a joint
solar and battery facility. This bid beat out gas plants and standalone
solar in an all-source competition, establishing a new model for firm renewable
power.
“We need to get our policies caught up to where technology
is,” said Lon Huber, head of consulting at Strategen, who developed
the clean peak concept on behalf of Arizona’s ratepayer advocate.
“States are starting to wake up to the fact that clean technology can do way
more they thought it could.”
The Baker Administration has a history of supporting storage
growth. It awarded $20 million to a group of storage projects in December. Last
summer, DOER set an energy storage target of 200
megawatt-hours by 2020.
A state analysis from 2016 found that 1,766 megawatts
would optimize
system benefits for ratepayers, but concluded that 600 by 2025 was more
feasible and would save residents $800 million in system costs. That level of
storage would equate to roughly 5 percent of the state's peak load.
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