Part 1 held on October 1, 2020; Part 2 held on November 10, 2020

On August 7th, after an extensive rules development process, the Massachusetts Department of Energy Resource (DOER) launched the first-of-its-kind Clean Peak Energy Portfolio Standard (CPS)! The CPS will incentivize the deployment and operation of clean electricity supply at the time of system peaks. It will impose a new obligation on load-serving entities which will provide a new revenue stream for eligible Clean Peak Resources (CPRs) – including new Qualified RPS Resources, Qualified Energy Storage Systems, legacy RPS Resources co-located with energy storage, and eligible Demand Response Resources.

Massachusetts is famous for its innovative – and complex – clean energy policies.

How will it work? Who can participate? How much revenue will it provide? Will the CPS revenue stream be financeable? How will it affect electricity costs and pricing to retail electric customers? What CPR project configurations will optimize this revenue opportunity? How will it interact with Massachusetts’ other existing programs, such as SREC, SMART, Connected Solutions, electric vehicle incentives, or offshore wind procurement?

The webinar series, a collaboration between Sustainable Energy Advantage (SEA) and Customized Energy Solutions (CES) (who also worked together to develop a market model used by DOER in its CPS rulemaking process – considered CPS issues, challenges and opportunities from the perspectives of owners of existing CPRsdevelopers of new CPRs, investors/financiers, load-serving entitiesdistribution companiesproject hosts, and market makers

On October 1st, SEA’s Bob Grace (SEA founder and leading expert on New England Renewable Portfolio Standard market dynamics) and Jim Kennerly (Senior Consultant, DER expert and policy lead), and CES’s Mike Berlinski (CES’s Director of Emerging Technologies and storage lead in New England) kicked off Part 1: Understanding Commercial Opportunities & Strategies, in which they: 

  • Recapped the key features of the CPS regulations and guidelines 
  • Discussed open policy design issues and questions 
  • Illustrated the dynamics of the CPS policy’s ‘self-correcting’ targets and Alternative Compliance Payments (ACP) 
  • Explored the degree of current uncertainty and expected volatility of future LSE compliance costs and Clean Peak Energy Certificate (CPEC) prices, and mechanisms to hedge costs and revenues, illustrated with CPEC market price examples over a range of supply-demand futures 
  • Presented a taxonomy of opportunities for  existing and new renewables, energy storage installations and demand response to participate in the CPS 
  • Assessed the range of potential expected lifetime CPEC revenue value for several illustrative CPR ‘use cases’, to help investors gain comfort with the CPS as a revenue stream.  Use cases explored: 
    • stand-alone energy storage (BTM and IFOM) 
    • offshore wind
    • SREC + storage (BTM and IFOM) 
    • SMART + storage (BTM and IFOM) 
    • existing hydro adding storage, and  
    • new offshore wind plus storage 
  • Discussed CPR design and operating issues & choices for each illustrative use case 
  • Characterized opportunities for partnering & pairing between energy storage and renewables

On November 10th, Bob Grace and Mike Berlinski continued their dive into the MA CPS with Part 2: Digging Deeper: Preliminary ‘Gap’ and CPEC Market Analysis, where they discussed: 

  • Present an overview of CPS market dynamics  
  • Examine the potential for the CPS revenue stream to enable investment in CPRs by looking at the ‘revenue gap’ between costs and revenues for specific examples. We will compare the range of potential CPS revenue with the ‘revenue gap’ between capital, operating, and opportunity costs and the available non-CPS revenue stack, for illustrative case studies including stand-alone energy storage, existing renewables paired with new energy storage, and new renewables paired with new energy storage. 
  • Explore the operational tradeoffs between CPS participation and other programs and their impact on CPS participation over time  
  • Deliver the CPEC price implications of a preliminary market supply-demand analysis of the initial CPR project pipeline analysis and potential market supply trajectories 
  • Preview our forthcoming CPS Market Fundamentals Analysis service

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Interested in knowing more about the Massachusetts Clean Peak Standard? So were we! So much so that we went ahead and created a brand new service all about it. Check out our Clean Peak Market Outlook Subscription Service to take your knowledge to the next level.