Distributed Energy Resources

Massachusetts regulators float “clean peak” straw proposal

Massachusetts regulators recently released a straw proposal tied to the development of rules to spur the use of “clean” energy during peak periods.

The Clean Peak Energy Standard being developed by the Massachusetts Department of Energy Resources grew out of sweeping energy legislation that became law in August.

The bill (H. 4857) increased the state’s renewable portfolio standard while also requiring a "clean peak" standard, which provides incentives for renewables, energy storage and demand response to provide power or reduce electric use when power demand is highest.

After a baseline amount of clean peak resources is established, utilities will have to increase their purchases of clean peak certificates by 0.25 percent a year. The DOER set a zero requirement for this year.

Under a straw proposal released April 2, four types of resources will be eligible clean peak resources: new RPS class I resources, existing class I resources coupled with new energy storage, energy storage that mainly stores renewable energy and demand response.

Energy storage paired with existing renewables must make up at least 25 percent of a resource’s capacity.

Distribution-level resources must be connected to the Massachusetts grid and transmission-level resources must be interconnected to the ISO New England system.

In Massachusetts, summer-time peaks have the most load, but winter-time peaks are more expensive and produce more air emissions, according to the DOER. Electricity prices and emissions jump in the winter when New England’s natural gas pipeline system becomes constrained, limiting imports into the region as generators and buildings compete for natural gas.

The DOER floated initial peak periods for each season:

  • Winter: 8am – 9am; 4pm – 7pm.
  • Spring: 8am – 9am; 5pm – 8pm.
  • Summer: 2pm – 6pm.
  • Fall: 8am – 9am; 4pm – 7pm.

A qualified Clean Peak resource will generate Clean Peak Certificates based on the average output of the resource during the peak period on a particular day, according to a summary of the straw proposal.

The DOER is considering a seasonal multiplier so Clean Peak resources generate more certificates in the summer and winter when peaks are highest. In those seasons resources would produce three times as many certificates than during the fall and spring.

Also, eligible resources would be granted 15 times as many certificates for operating during the previous month’s actual peak hour. The multiplier would be a “pay-for-performance” component of the Clean Peak standard, according to the DOER.

“Retroactive application of the multiplier will incent project owners to ‘chase the peak’ and will increase likelihood that resources operate at times where they can provide the highest value,” the DOER said.

The agency is considering having a multiplier for resources that promote grid resilience.

The DOER is still studying average daily reduction targets, estimated compliance obligations, costs and benefits.

The agency aims to keep ratepayer costs at less than 0.5 cents per kilowatt-hour.

The DOER is taking comments on the straw proposal until April 12. The agency plans to release draft regulations in the second quarter, with hearings in the following quarter, and the final rules coming out by early next year.

Additional details are available here.