Commonwealth Offshore Wind Industry Investment Program
The bill would create a “Commonwealth Offshore Wind Industry Investment Program” administered by the Massachusetts Clean Energy Center (“Mass CEC”) to develop and promote employment and economic development related to the wind industry. offshore. “Offshore wind companies” participating in the scheme may include entities “engaged in the development, manufacture or marketing of offshore wind turbines in the Commonwealth and any subsidiary thereof. . . .” “Offshore wind organizations” engaged in offshore wind development, such as non-profit organizations, labor organizations or certain educational institutions, may also participate. Offshore wind companies that wish to be certified by Mass CEC to participate in the program must submit their plans for generating new revenue for the state, raising additional funds or attracting additional resources to Massachusetts, and creating local jobs. Once certified, participants may be eligible to participate in a tax incentive program for the offshore wind industry (a $30 million per year program); receive grants, loans, or other investments of more than $5 million from a new Massachusetts Offshore Wind Industry Investment Fund, and receive help from Mass CEC to access other programs economic incentives and federal grants.
The Offshore Wind Industry Fund would be financed by mandatory charges for all natural gas and electricity customers not served by municipal lighting facilities. The funding level would be more than twice that of the Massachusetts Renewable Energy Trust Fund. Among other things, Mass CEC would be allowed to invest the fund to stimulate increased funding for the siting and expansion of permanent offshore wind turbine manufacturing facilities in the Commonwealth, provide funding for up to 50% of project costs. interconnection of an offshore wind project, promote offshore wind innovation and manufacturing of new or existing technologies, support the development of port infrastructure for the offshore wind industry, and raise funds to secure any future federal financial support for the offshore wind. Private investors would also have the opportunity to invest in the fund’s activities and participate in the fund’s income.
Proactive plans to modernize the transmission and distribution network
In consultation with a newly created Network Modernization and Planning Board, electricity distribution companies would be required to submit for Department of Public Utilities (“DPU”) approval specific investment plans that address system resilience; new technologies such as smart inverters, controllable load, advanced meters and energy storage; distributed energy resources; the facilitation of transport or the electrification of buildings; and achieving Commonwealth emissions limits.
Amendments to Section 83C
The Bill would make several changes to the Offshore Wind Energy Supply Act, Section 83C. First, the amount of offshore wind power to be acquired would be increased to 5,600 MW from the 4,000 MW amount last set by St. 2021, c. 8, Legislation creating a next-generation roadmap for Massachusetts climate policy. The bill would also eliminate the requirement that the discounted price per MWh of subsequent supplies must be equal to or less than that of the previous supply. In addition, the bill provides that the selection committee’s bid evaluation criteria would be “promulgated” by the Secretary of Energy and Environmental Affairs, whereas currently the law only provides the DPU’s criteria for contract approval. The bill provides that the selection committee must give preference to projects which, among other things, demonstrate “the greatest contributions to economic development and employment for the Commonwealth”. The bill also requires preference for projects that demonstrate the benefits of “energy storage, including new and existing long-duration energy storage systems.”
Offshore wind transmission
The bill would require the Department of Energy Resources (“DOER”) to solicit competitive bids for the transmission of offshore wind energy sufficient to supply the energy to be acquired under Section 83C. This transmission would be developed independently of offshore wind projects. While the bill authorizes DOER to coordinate solicitation with the DPU, distribution companies, other states and ISO New England, it does not dictate the contractual terms of the transmission project or the source of funding.
The bill would require electricity distribution companies to file a tariff applicable to stand-alone energy storage systems interconnected to the distribution network. The tariff must be designed “without unduly impeding the participation of energy storage systems in electricity markets and other uses of these systems that provide benefits to the electricity grid”. (Note that ISO New England is in the process of revising its tariff, as required by the Federal Energy Regulatory Commission, to ensure that its tariff allows distributed energy resources, such as energy storage , which are interconnected to distribution systems to participate in wholesale electricity markets as aggregates of distributed energy resources).
Finally, the bill requires the Carbon Reduction Research Center to conduct no later than May 1, 2022, in consultation with the Massachusetts CEC and DOER, a study on “how to optimize the deployment and use of systems new and existing long-term energy storage systems”. in the commonwealth capable of absorbing energy, storing it for a period of time and then dispatching it for a minimum period of five hours or more.