Massachusetts Launches Program to Foster Clean Energy Generation During Peak Periods

The Massachusetts Department of Energy Resources on Aug. 4 announced the launch of the Clean Peak Energy Standard, an incentive program designed to encourage the use of clean energy resources during times of peak electricity demand. The first-in-the-nation program requires retail electricity suppliers to increase their kilowatt-hour sales from clean energy during seasonal peak demand hours every year. The clean peak standard begins at 1.5 percent of retail electricity sales in 2020 and increases by 1.5 percent annually through 2050. The initiative creates an opportunity for storage technologies such as batteries, which store electricity for use when needed.

The standard stems from a 2018 law –  An Act to Advance Clean Energy – followed by extensive stakeholder engagement on the design and implementation of the program. The program design is based on the framework of the state’s existing clean energy policies, such as the renewable portfolio standard.

Clean Peak Energy Certificates, or CPECs, are generated by eligible resources that generate, dispatch, or discharge energy during a particular time of the day for each season. Therefore, the CPEC market creates revenue streams for energy storage and other resources that are capable of shifting energy usage away from peak periods – time durations when electricity demand is typically highest. Electricity suppliers are required to buy a certain amount of Clean Peak Energy Certificates, or CPECs, each year based on a prescribed percentage of the amount of power that they supply.

The standard paves the way to achieve deeper emission cuts, energy savings, and increased energy resiliency, and combat climate change issues. Together with recent updates to the Solar Massachusetts Renewable Target, or SMART, solar incentive program, the new standard will serve to utilize storage technologies to target peak demand.