Northeastern states have enacted a dizzying array of policies to encourage energy storage development alongside the growth of renewables over the past couple of years.
Where the battle used for a lack of lucrative storage opportunities, now the trick is keeping up with new programs, incentives and marketplace rules.
“The Northeast is a place that, from a storage perspective, is starting to come into its own,” said Brett Simon, energy storage analyst at Wood Mackenzie Power & Renewables. “In New York and Massachusetts especially, we are on the cusp of seeing fairly substantial expansion on both sides of the meter.”
This area is united in its muscular state policy stances on combating climate change with a pivot to cleaner power. Aggressive clean energy coverage alone benefits from larger capacity to store intermittent production, but the Northeast also has a geographical interest in resilience in the face of hurricanes, nor’easters, ice storms and blizzards.
This corner of the U.S. generally subscribes to competitive wholesale markets. That means that, besides bringing state incentives, solar-plus-storage developers can augment their earnings with wholesale marketplace involvement in PJM, New York ISO or ISO New England.
Meanwhile, the region’s distribution utilities have embraced a”bring-your-own-device” mindset, allowing customers earn money through timely use of the own energy devices.
To make sense of the opportunities ahead of a regional forum on the topic later this month, GTM is rounding up the top-line developments for solar and storage from Northeastern states. The geographically talented will observe the absence of Connecticut, Maine and Rhode Island; once they create more storage policy and action, they can join their neighbors on the list. Maine’s storage study, due in December, will suggest appropriate legislation and procurement targets, demonstrating that storage progress in the area is far from over.
Massachusetts
Gov. Charlie Baker’s administration is racing Gov. Andrew Cuomo of New York to see who will assemble the most bustling storage market first.
To attain that goal, Baker established the Solar Massachusetts Renewable Target (SMART) incentive, which pays solar customers for every kilowatt-hour produced and adds a premium for storage-paired manufacturing companies.
It’s tough to say exactly how valuable this incentive is. It depends on production over the years, and varies based on discharge length and ability ratio.
The SMART interconnection queue already includes over 130 megawatts of storage.
Small systems (under 25 kilowatts) have been getting installed , Simon said. Larger solar-plus-storage projects, especially in congested grid locations, take more; interconnection can stretch over 18 to 24 months.
Past SMART, distributed storage may participate as a aggregated resource in the ISO New England forwards capacity market. Sunrun proved this by winning a 20-megawatt contract back in February; today it has to develop enough home systems in the land to include up to that amount.
Looked at another way, Sunrun’s bid means the San Francisco-based company feels confident that the home storage market will eliminate in New England from the two years before the contract comes due.
Stacking state incentives with wholesale market involvement also appeals to commercial providers, who capture those revenue streams while pitching customers on demand savings.
“Massachusetts is here now; it’s happening,” said Engie Storage CEO Chris Tilley. “You’re going to see a good deal of announcements, I suspect, within the next six months”
Massachusetts has also declared a Clean Peak Standard, to ensure a growing portion of peak-hour electricity comes from clean rather than fossil-fueled sources. That coverage is still being finalized, so it’s hard to say exactly how exactly it will translate into business opportunities.
New Hampshire
Utilities are pushing energy storage in New Hampshire as an innovative solution to peak power constraints.
Liberty Utilities kicked off the trend with its strategy to use Tesla Powerwalls in customer homes to decrease system peak consumption. The customers get backup power and a time-of-use speed that aligns personal incentives with system needs; the usefulness gets a distributed choice to more capital-intensive grid upgrades. And third party companies will have a chance to take part in a bring-your-own-device (BYOD) program.
Eversource New Hampshire followed with its own spin on the idea. It wants to back up the entire remote city of Westmoreland using a blend of central, utility-owned battery and customer-sited energy devices, with internet savings compared to building a redundant distribution line out there.
The state has been quiet on total energy storage policy, allowing the utilities lead the way. Still, this strategy has made a sizable chance for residential solar and storage setup and aggregation.
New Jersey
The Garden State has an unusual disjoint between official policy and activity on the ground.
The state passed an energy law in 2018 calling to get a storage study and setting a goal of 2 gigawatts installed by 2030. That’s among the largest targets in the country, on paper, but it hasn’t spurred follow-on action to start up a marketplace.
“New Jersey does have some amount of opportunity, but it’s really murky because there’s not a great deal of concrete coverage to support it,” Simon said.
It is part of PJM territory, but the once-great marketplace for frequency regulation has all but dried up. Viridity’s recent completion of two 20-megawatt/20-megawatt-hour batteries in New Jersey delivered a rare exception to the rule.
Even an incentive to back up critical commercial and industrial infrastructure together with renewables and storage failed to get projects in movement. The Renewable Electric Storage program given funds, however, years later, it counts only one finished project (also by Viridity), two from the pipeline, and 15 canceled.
New York
New York spent years on the long-simmering Reforming the Energy Vision effort to turn the grid into a stage for competitive service providers. What’s finally jump-starting the storage market, though, is a barrage of funding to get projects on the ground now so as to bring down costs for the long haul.
The”bridge incentive,” designed to insure the spread between the worth of storage and the monetization available currently, kicked off to most of the state in April. The declining block grants allocate $150 million into bulk projects and $130 million to retail systems smaller than 5 megawatts. The first block of retail incentives got gobbled up in the first two weeks.
That funding could support 1.8 gigawatt-hours from 2025, Simon estimated, pushing the state considerably closer to its aim of 3 gigawatts from 2030 (the units, alas, don’t always line up in these calculations).
The state followed up a few months later with $55 million targeted at storage on Long Island, which has a geographically constrained grid, resilience needs and is set to receive a really colossal amount of offshore wind production from the mid-2020s. Long Island also has its BYOD program, which will reward customers for using their batteries to reduce demand at crucial times.
1 path of funding is not enough to make a proper marketplace, however. Projects can make money for values like environmental benefit and peak demand reduction.
A rule change in April locks in compensation rates for a short time, making more certainty around VDER worth streams.
“It doesn’t give a financier plenty of confidence if they’re only guaranteed revenue for a couple of years,” Simon noted.
Developers now can stack some combination of the federal Investment Tax Credit, block grants, VDER earnings, customer contracts, BYOD programs as well as participation in the NYISO wholesale markets, creating many paths to job profitability.
Vermont
Even before New Hampshire utilities spoke about enlisting batteries in homes for grid benefit, Vermont utility Green Mountain Power was already doing it.
The company, which serves roughly three-quarters of the state’s electricity users, offers customers a Tesla Powerwall for $15 a month to provide backup power in an outage. In exchange, the usefulness calls upon the network of small batteries to lower its consumption during the yearly peak. Last year, GMP saved customers $600,000 through the year’s peak hour, with the help of 610 Powerwalls within the field.
That program has room to grow, but so does large-scale storage. GMP committed in April into carbon-free power by 2025 and renewable-only power by 2030. That requires dispatchable electricity, and the company has said storage will be critical for this goal.
Its integrated resource plan from 2018 also known as 50 megawatts and 100 megawatts of”additional storage and flexible load resources,” respectively, in the next ten years.
