Energy Storage for Winter Grid Reliability: Lessons from Massachusetts

Applied Economics Clinic and Clean Energy Group have released a new report that finds that customer-sited battery storage is by far the lowest priced new winter peaking resource now available to Massachusetts utilities; that payments to customers enrolled in the Commonwealth’s ConnectedSolutions battery program should be increased by at least 33 percent; and that program budgets should be expanded significantly. The report’s authors highlighted these findings in this webinar.

At present, the value of winter peaking capacity services from distributed (customer-sited) resources is incorrectly assumed to be $0 in the Massachusetts battery program cost-benefit analyses that determine performance payments to battery storage owners. The new report finds that the true value of these important services is not zero; in fact, utilities pay huge sums for winter reliability services to avoid blackouts and supply winter electric demand peaks. The true value of these winter peaking services should be calculated, and used in determining future winter seasonal performance payment rates for battery customers, who are not currently being paid commensurate with the value of the service they provide.

These changes need to be made immediately. Winter electric peaking capacity (called “winter reliability” in New England) provides an important value to the electric grid by helping to avoid winter blackouts. As heating and transportation are increasingly electrified to meet climate goals, winter peak energy needs will grow; and as fossil-fueled generators are phased out due to emissions caps, new, clean sources of winter peaking capacity will need to be found.

Panelists:

• Joshua Castigliego, Applied Economics Clinic
• Liz Stanton, Applied Economics Clinic

Moderator: Todd Olinsky-Paul, Clean Energy Group