Market Update

MA Energy Storage Initiative

Massachusetts’ Energy Storage Initiative (ESI) was created in 2015 to accelerate the commercial use of energy storage in the Commonwealth. Driving the work, $10 million in 2014 Alternative Compliance Payments (ACP) were allocated to advance the initiative. The state has been working to create a framework to first better understand the benefits to energy storage, and second create an implementation plan based on the findings. As such, the state commissioned an energy storage study, State of Charge, which was released in September 2016.

Based on economic modeling of the grid and benefits of energy storage, the study determined that ratepayer benefits could be maximized up to 1766 MW of storage, with a total system benefit of up to $2.3 billion.

System benefits included: 

  • Energy cost reduction
  • Reduced Peak capacity (given ISO-NE ease of market rules)
  • Ancillary services cost reduction (given ISO-NE ease of market rules)
  • Wholesale market cost reduction (given ISO-NE ease of market rules)
  • T&D Cost reduction;
  • And Integration of distributed generation cost reduction

The document ultimately recommended policies that would aid Massachusetts in developing 600 MW of energy storage. Some suggestions which would economically incentivize additional storage included:

  • Expanding the APS to include advanced energy storage, other than the existing flywheels
  • Create a “solar plus storage” pilot program to finance site assessments for small commercial and industrial facilities
  • Provide grants for municipal resilience projects which use clean energy and storage and under the “Community Clean Energy Resiliency Initiative”
  • Include storage as an eligible technology in the Green Communities Grant Program

Post-Study Energy Storage Implementation

After the study, the state began implementing the various study suggestions. A $10 million grant program was created for energy storage demonstration projects that provide replicable energy storage use cases outlined in State of Charge. The intent of the funding was to create projects that address barriers to storage deployment in Massachusetts, and help to grow the state’s energy storage economy. The opportunity closed in June and grants have yet to be awarded.

In July, DOER put forth an aspirational target of 200 MWh of energy storage for electric utilities to procure by January 1, 2020. This will likely create an avenue for additional innovative projects.

While there is still much to be determined, Massachusetts is gearing towards creating an energy storage market, making storage a more accessible and viable option. For sites with cogeneration, and additional distributed generation like solar, energy storage can provide added resiliency and stability by leveling energy peaks throughout the day. Additional benefits include incentives through the SMART program, and access to additional revenue streams by participating in capacity and ancillary markets. Next Grid is following the developments in order to understand how it might apply to our clients.

More information on ESI can be found here:


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