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Unsubsidised ESS projects to ‘pay dividends’ for New England’s municipal utilities

Ground-breaking for the Sterling Municipal Light Department project in 2016. In two years since going online, that project is reported to have saved ratepayers over US$1 million. Image: NEC Energy Solutions.

The contracting of more than 20MW of new ESS projects to NEC in New England shows that municipal utilities in the US region are now able to procure and put into operation unsubsidised energy storage systems for their networks, the company has said.

NEC announced the award of six projects throughout counties in Massachusetts and Maine yesterday, including a 3MW / 6MWh project just contracted with Taunton Municipal Lighting Plant. NEC’s Energy Solutions division built the first utility-scale standalone battery project in Massachusetts which went into operation in late 2016. The company said that in two years of operation, that 2MW / 3.9MWh system, built for Steling Municipal Light Department, has already saved ratepayers more than US$1 million.

Energy-Storage.news has reported on various other new projects and market developments in New England since then, including a 1GW by 2025 deployment target for ESS and a so-called ‘clean peak standard’. An NEC company spokesman told Energy-Storage.news today that “several factors have stimulated this growth, including Sterling Municipal Light Department proving the technology is reliable, cost-effective and proves the savings are achievable”.

Another ESS project by NEC for a municipal utility in the region, Ashburnham Municipal Light Plant, went online in January this year, although an official inauguration was held off on until late May. That project saw 25% of funding come from Massachusetts’ state Advancing Commonwealth Energy Storage (ACES) programme, a partnership between the state’s Department of Energy Resources and Massachusetts Clean Energy Center.

The ACES programme seeks to accelerate deployment of innovative projects that can be replicated broadly in the region, with funding allocated competitively between proposed projects. While the ACES programme benefited some of the new projects, the NEC spokesman said that that original grant funding had in itself “stimulated a second wave of procurements,” while other stakeholders are now moving forward into a business-as-usual territory.

'Inflection point has been reached'

Now, even without supplemental funding, the NEC representative said, deploying ESS “just makes economic sense due to cost reductions in the storage equipment and increasing transmission costs”.

The latest 20MW of contracted projects will reduce transmission and capacity costs for the utilities, with an expected emphasis on reducing peak demand. A few short peak demand periods essentially determine what utilities will pay throughout the year for those capacity and transmission costs. The already-completed Sterling plant also gives the local network some backup capabilities in case of outages.

The ownership structure of municipal utilities was also an added advantage for NEC’s business case: the company spokesman told Energy-Storage.news that “municipal entities control their own approval and interconnection process enabling faster decision processes and approvals to project execution”.

“When there is a clear economic advantage to [their] ratepayers they can move swiftly to take advantage of technical innovation and cost declines,” the NEC spokesman said.

As with other NEC grid projects, the six municipal ESS sites will use NEC’s GSS grid-scale storage solution, including the company’s proprietary controls and monitoring software platform, AEROS. Strategic dispatch of energy from the batteries to the grid therefore reduces the customer’s heaviest electric loads on a monthly basis.

Control and dispatch for ESS projects contracted by three of those Massachusetts municipal power plants will be coordinated and managed by the Massachusetts Municipal Wholesale Electric Company (MMWEC). Through its 24/7 operations centre MMWEC, which develops and manages power projects for municipal groups, will connect projects in Wakefield, Ashburnham and Templeton to its peak load forecasting and remote dispatch programme.

“These projects continue to pay dividends as the combination of MMWEC’s peak forecasting program, along with these installations, are proving to be beneficial,” MMWEC CEO Ronald C Decurzio said.

As mentioned earlier, the projects follow some recent adaptive moves in the policy and regulation space in New England and Massachusetts that have also seen ENGIE Storage partner with equity firm Syncarpha Capital to develop a 19MW portfolio of community solar-plus-storage which will then be allowed to operate in the in the ISO-NE wholesale capacity, reserves, and frequency regulation markets. Syncarpha Capital is also working with another commercial storage provider, Stem Inc, on 28.2MWh of large-scale storage co-located with solar PV in Massachusetts.

Additionally, in July, SolarEdge’s StorEdge inverter solutions were deemed eligible for ConnectedSolutions, a programme rolled out by National Grid in Massachusetts and Rhode Island encouraging customers to help reduce peak demand on local networks. Further back in February, residential PV company Sunrun hailed as a "breakthrough moment" the award of a 20MW capacity contract from the New England ISO.

Meanwhile, the NEC spokesman said that its own latest activity “is added proof of an inflection point in the adoption of energy storage in the market as municipal entities are now moving forward with projects without subsidies”.

Massachusetts Clean Energy Center posted this simple graphic on its Facebook page to explain the value proposition of the National Grid New England ConnectedSolutions programme: "On hot summer days you could be making some cold hard cash if you have a solar electric system & a battery." Image: Massachusetts Clean Energy Center Facebook page.

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