Energy Bill Boosts Prospects for Offshore Wind and Energy Storage
On August 1, 2016, the Massachusetts State Legislature passed H. 4568 (An Act to promote energy diversity) which will shape the state’s energy future with an ambitious offshore wind energy target of 1,600 MW, provisions for energy storage mandate, and additional clean energy procurements. The policy will likely provide a much-needed impetus for the U.S. offshore wind industry and also help other industries, such as solar companies that offer solar-plus-storage products.
The legislation takes an unprecedented approach in creating a carve-out for offshore wind and specifying that energy storage – traditionally classified as generation – may be owned by distribution companies, which have hitherto been precluded from such ownership due to the distinction between generation and distribution companies. In addition, Massachusetts could potentially become the third U.S. state to set targets for energy storage procurement, after California and Oregon, as the bill requires the Department of Energy Resources to decide by the end of 2016 on setting targets for electric utilities to procure energy storage by 2020.
H. 4568 requires utilities to procure 1,600 MW of offshore wind capacity by 2027 and an additional 9,450,000 MWh of annual electricity generation from Renewable Portfolio Standard (RPS)-eligible resources and hydroelectricity by 2022. Among other provisions, the legislation calls for a program to promote property-assessed clean energy (PACE) projects to finance energy efficiency upgrades and clean energy for commercial buildings. The legislation also allows for amendments to the net energy metering tariff to create a program for small hydroelectric net metering facilities and a cost allocation method to ensure cost-sharing among all ratepayers.
Clean energy advocates hailed the legislation for supporting investment in clean energy. The American Wind Energy Association (AWEA) expects the legislation to vitalize the U.S. offshore wind industry. However, the 486-MW Cape Wind project offshore Massachusetts, proposed in 2001 and currently halted due to commercial challenges and litigation, falls outside the scope of the bill, which stipulates that offshore projects must be located ten miles from any inhabited area.
The Massachusetts bill adds to the list of state-led efforts to expand opportunities for renewable energy and storage technologies. On the same day (August 1), the New York Public Service Commission (NY PSC) approved (16-E-0270) the Clean Energy Standard (CES), which establishes a 50 percent clean energy target and a commitment to support struggling nuclear plants upstate.