Friday, July 07, 2017

Bay State Energy Storage

Last month the Massachusetts Department of Energy Resources set a new target in the Bay State for 200 megawatts of energy storage capacity by the year 2020.  Every electric distribution company operating in the state will have to submit a report by January 2020 detailing how they have complied with the energy storage target.  That is an ambitious plan.  Massachusetts is apparently serious about energy storage as a result of its 2016 State of Charge Report, which detailed the value of deploying energy storage.  The study found that “hundreds of millions of dollars” could be saved by electricity users in the state through minimizing the impact of peak demand and reducing carbon emissions.

In 2016, Massachusetts generated 66% of its electricity using natural gas.  The dominance of natural as should be no surprise given that the state hosts three liquefied natural gas import terminals.  Nonetheless, it seems that solar may soon be playing a more important role.  In the same year 88% of new installed, utility-scale electrical generating capacity was solar technology.  The Massachusetts Governor's Office is also supportive of wind power sources, setting a goal of 2,000 megawatts of wind energy capacity by 2020 from its current 115 megawatts installed base in 2016.  
Fortunately, the Massachusetts state government had already taken steps toward supporting its renewable energy base with a new Energy Storage Initiative and $10 million funding commitment to support energy storage companies in the state.  A total of $4.7 million in funding has already been award to nine projects, of which five have objectives related to energy storage.

·        Peak demand technology demonstration at Kohl’s department stores
·        Behind-the-meter battery storage project at a manufacturing site
·        Peak demand reduction solution with thermal energy storage at residential sites
·        Grid-scale lithium-ion battery storage for peak demand reduction
·        Aggregated energy storage project for peak demand reduction on electrical grid

Public support for technology initiatives and innovation are a good omen for worthy smaller companies that might not otherwise fair well in the private capital markets.  Public initiatives like the Massachusetts Energy Storage Initiative are a good place to look for private investment and public stock investment opportunities.  Interestingly, electric distribution companies in Massachusetts have considerable flexibility in meeting the energy storage target, leaving it to private enterprise to choose the best alternative based on ownership models, system sizes and technology types.  This seems like the sort of arrangement that encourages the most meaningful innovation and creativity.
We begin new series featuring several of the recent funding recipients and project leaders. 

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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