Convergent discusses impact of Clean Peak modifications on MA storage sector
Convergent Energy and Power’s Emma Marshall-Torres, manager of regulatory affairs and strategy, said Massachusetts’ recent rule change to its Clean Peak Energy Standard program should offer much-needed relief to providers footing the bill for increasing project costs.
Massachusetts’ Clean Peak Energy Standard was created to encourage utilities to support renewables and reduce fossil fuel use during high-demand times by requiring providers to buy Clean Peak Energy Certificates (CPECs) yearly. The state requires utilities to purchase a percentage of its annual supply in CPECs and meet its minimum standard. If utilities cannot meet that minimum, they have to pay an Alternative Compliance Payment, which serves as a penalty fee, Marshall-Torres explained.
On July 12, the state issued an emergency rule change to its Clean Peak Standard to alter the minimum standard for 2024, and implement a slower introduction to the portion of renewables utilities will be required to buy, according to the Department of Public Utilities (DPU).
The stakes are enormous here for in-state standalone storage development as NPM queue data tracks 91 applications for pre-operational standalone storage projects, across 15 GW, filed in Massachusetts. Approximately 23 of those applications are at 20 MW or below. Among those is Convergent, which Torres said has its own projects in the Commonwealth pipeline, while the likes of Plus Power, ConnectGen and Jupiter Power also have in-state projects in the pipeline
Convergent’s Marshall-Torres said the rule change solves a problem within the program that would have resulted in higher bills for everyone.
“The state decided that they were going to decrease the amount of credits that they would require utilities to procure from 2024-to-2028 because they know there’s been a lot of delays with development,” Marshall-Torres said. “They’re recognizing those assets aren’t here now … they don’t want to force utilities to pay the alternative compliance payment, which is an expensive fine, and it’s something that ultimately, the people of Massachusetts would have to pay for.”
A Cape Cod native, Marshall-Torres is active in a number of clean energy advocacy groups, including Advanced Energy United, Northeast Clean Energy Council (NECEC), RENEW Northeast (RENEW NE). The current environment for incentives for storage “falls short” in the Commonwealth, but this rule update may change that to make the future grid more dependable.
“What has happened with this order is the industry is saying that basically it’s a bit of a chicken and egg situation, where the cost of development is now so high, we don’t feel like this program is changing to reflect that,” Marshall said. “It was really hard for us to get a signal to know to continue with our interconnection applications and know that it would be worthwhile or that this program has a robust future.”
Policy change
The emergency rulemaking changes the minimum standard from 2025 through 2050 and adds a near-term resource multiplier for standalone storage interconnected to the distribution system. That minimum standard is set to increase starting in 2029, as more projects come online.
The changes to the program are meant to provide a short-term bridge for expensive costs related to permitting, land purchasing and interconnection costs, and the multiplier will double the credit value paid to developers for assembling storage that is connected to the distribution system and comes online before January 2027.
“Naturally a double multiplier of the credit value is a sizable increase and positive market signal, but the amount of projects that can realistically realize the multiplier may be limited by maturity requirements, in addition to the COD deadline of January 2027, a capacity limit — only x amount of MW can receive the multiplier — and other details that will be elaborated upon in the application to receive the multiplier,” Marshall-Torres noted.
She added that the Department of Energy Resources has indicated they will soon share the application with developers, “who will have to weigh the benefit of a doubled credit value against their own understanding of the present cost of development, which they would have to accept if they are to meet the 2027 deadline.”
The rule change comes as the Department of Public Utilities is asking for a 25% payment due within 20 days to force investors to assess their risk appetite for projects in the pipeline. Marshall-Torres said that should resolve some of the delays in the interconnection process. She said it forces developers to ask themselves, “Are you just holding a project because you want to be able to say that you have something or are you really willing to hold onto this parcel through regulatory risk, through utility risk, and seeing this project through,” she said.
The Convergent manager said the slower pace for increasing renewables in the Commonwealth “is not ideal, but it’s better for everyone.”
Now, developers like Convergent are awaiting final rules from the Department of Public Utilities, which must move through a process of hearings and feedback. Marshall-Torres said the January 2027 deadline to bring storage online has created urgency in the market, but “the devil will be in the details” of that final ruling.
*This story was originally published exclusively for NPM subscribers in July.
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