Program Will Promote Use of Clean Energy When Costly Electricity Demand is Highest
BOSTON – The Baker-Polito Administration today announced the launch of the first-in-the-nation Clean Peak Energy Standard (CPS), a financial incentive program that promotes the use of clean energy technologies to supply power when electricity demand is at its highest, also known as peak demand. Through the CPS, the use of clean energy during seasonal peak periods will reduce greenhouse gas emissions, lower electricity costs and facilitate the continued growth of renewable energy in the Commonwealth.
“To combat climate change, we need to change the way we consume our energy, the resources we use, and when we use them,” said Governor Charlie Baker. “This first-in-the-nation program is an innovative approach to create a cleaner and more affordable energy future for residents and businesses across the Commonwealth, while serving as a national role model for making meaningful reductions in greenhouse gas emissions.”
“The effects of climate change are already impacting our communities, and we are taking the necessary steps today to create a better future for Massachusetts,” said Lieutenant Governor Karyn Polito. “This program will increase energy resiliency for our communities, particularly during power outages, while also improving air quality and lowering energy costs for residents and businesses.”
The CPS program is designed based on the framework of existing Massachusetts clean energy policies, such as the Renewable Portfolio Standard (RPS), and utilizes a familiar structure to the clean energy market in Massachusetts. The CPS creates a requirement for all electricity suppliers to purchase a certain amount of Clean Peak Energy Certificates (CPECs) each year based on a specified percentage of the amount of electricity that they supply.
Eligible clean energy resources that generate, dispatch, or discharge energy during specified times of the day during each season of the year will generate CPECs. The CPEC market will create revenue for resources, like energy storage, that can shift energy usage from the seasonal peak periods or the time periods during a season when the net demand for electricity is typically highest.
“The Clean Peak Standard enables the Commonwealth to achieve deeper emissions reductions, provide energy savings to residents and businesses, increase energy resiliency, and meet the many challenges posed by climate change,” said Energy and Environmental Affairs Secretary Kathleen Theoharides. “By ensuring the use of clean energy resources at the historically dirtiest and most expensive times of the day, we will be able to build on our progress in meeting our net zero emissions goal and building a clean energy future for Massachusetts.”
“Innovative policies are critical to facilitating the Commonwealth’s transition to a clean energy future and the CPS, along with significant updates made to our SMART program, are key strategies for the Commonwealth to utilize electric storage to target peak demand, lower greenhouse gas emissions, and reduce electricity costs,” said Department of Energy Resources Commissioner Patrick Woodcock. “Today’s announcement is a major achievement that will help us meet our climate goals and allow us to strategically utilize clean energy during the hours of highest demand, emissions, and costs.”
Originally proposed in Governor Baker’s 2018 Environmental Bond Bill, the Clean Peak Energy Standard was part of An Act to Advance Clean Energy and signed into law in August 2018. This announcement follows more than a year of extensive public engagement with industry stakeholders, the joint Telecommunications, Utilities, and Energy (TUE) Committee, and other advocates on the design and implementation of the program.
“The U.S. Energy Storage Association (ESA) commends the Baker-Polito Administration as it launches the first-in-the-nation Clean Peak Energy Standard (CPS). The administration pioneered this innovative, new regulatory tool to reduce the costs and environmental impacts of periods when electricity demand is the highest and generation tends to be the most polluting. During these peak periods, CPS drives the use of energy storage resources to deliver clean energy where it’s needed, when it’s needed,” said ESA Chief Executive Officer Kelly Speakes-Backman. “CPS is an important step toward making the grid more resilient, efficient, sustainable and affordable. ESA looks forward to working with Massachusetts officials and stakeholders to ensure its success and to provide a replicable model for other states.”
The Clean Peak Energy Standard application portal, managed by the Massachusetts Clean Energy Center (MassCEC), is scheduled to go live on August 17, 2020. MassCEC and DOER will host a stakeholder informational session on August 10, 2020.
For more Clean Peak Energy Standard program information and other details, please visit HERE.