51st State Perspectives: Massachusetts: A Great Clean Energy Story – DERs and the Next Chapter
Massachusetts has been a leader in the deployment of clean energy. It was an early adopter of RPS and has focused on energy efficiency. The Commonwealth’s commitment to reducing its green house gas (GHG) has informed these policies, as well as other targets to implement EVs and battery storage.
Renewables make up 13% of total energy usage in the Commonwealth. Decentralized renewable generation makes up 9.2% of nameplate capacity. These figures illustrate the degree to which renewables are part of the Commonwealth’s energy generation and consumption. Further demonstrating its priorities, the Commonwealth’s current 2016–2018 Three-Year Energy Efficiency Plan sets a nation-leading energy savings target of 2.94% of electric sales. New England, generally, and Massachusetts, specifically, have been at the forefront of discussions to bring offshore wind and cheap hydropower from Canada into the region.
Such initiatives notwithstanding, the question this paper explores is whether and to what degree regulators and utilities are changing key elements of the utility business model and physical infrastructure to further accommodate distributed energy resources (DERs). DERs are defined as rooftop solar, battery storage, EVs, and demand response, typically located behind the customer meter. In states considered “transformative” in previous 51st State Perspective reports, there has been a combination of investment in infrastructure, proposals to change the ratemaking construct, and clear regulatory focus on the integration and optimization of DERs.
When compared to other states, the Commonwealth has not provided the same focus on upgrading infrastructure, deploying advanced metering infrastructure (AMI), or optimizing DERs as other states have. Some states have put particular emphasis on the integration and optimization of DERs. In places like New York and California, this focus has included proceedings related to valuing DERs on the grid, identifying beneficial locations, implementing non-wires alternatives with DERs, and sharing of data with DER developers that enable them to select optimal locations for implementation. Other proceedings have pushed utilities to make DER interconnection processes more streamlined. Pilots in both states have focused on how to integrate DERs into the distribution system (and some cases in the wholesale markets) and demonstrate the benefits they can provide under certain use cases. This does not diminish the Commonwealth’s achievements in clean energy generally, but it does speak to the priorities that the DPU and legislature have set.
As in earlier 51st State Perspectives papers on New York, California, Illinois, and Colorado, this paper discusses the degree to which Massachusetts is transforming its grid to accommodate a variety of resources and will:
- Discuss the current state of the electricity market in Massachusetts
- Evaluate the degree to which the market has evolved from a traditional, centralized grid with limited customer choice to a more distributed system enabling more customer choice
- Assess whether Massachusetts’ utilities are prepared for rapid growth of DERs
This paper, co-authored by ScottMadden and the Smart Electric Power Alliance (SEPA), begins by identifying the efforts taking place in particular areas through the lens of the market transformation “swimlanes” developed by SEPA in its previous report, The 51st State—Phase II Developing Roadmaps to the Future. The swimlanes are organized to describe the current state of:
- Retail market design
- Wholesale market design
- Utility business models
- Rates and regulation
- Asset deployment
- Information technology
The paper then assesses the degree of transformation taking place in Massachusetts against the four key market reform doctrines from another SEPA report, The 51st State—Blueprints for Electricity Market Reform.
By combining these two frameworks, this paper provides a holistic view of the Commonwealth’s electricity market and assesses the degree to which it is transforming these elements to further integrate DERs.
Additional Contributing Authors: Chris Sturgill of ScottMadden, Sharon Thomas of SEPA
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