Northeast Clean Energy Application Center

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Massachusetts

Existing & Future Potential Overview

Industry is the only sector which has experienced significant CHP penetration to date, primarily with large CHP systems of at 5 MW or larger. A study of customer sited CHP that did not include the largest projects identifies 121 commercial/institutional, industrial and residential CHP systems with total electrical capacity of 375 MW, and an average system size of 3.1 MW. (Mattison) In the industrial sector, the largest users of CHP are in paper and chemical manufacturing, typified by very large CHP plants, accounting for at least 800 MW of Massachusetts’s installed capacity. A different comprehensive survey identified 137 CHP installations in Massachusetts, with a total generating capacity of 1,585 MW. (Gerrish) The majority of existing CHP systems by number, if not by generating capacity, are installed in commercial and institutional buildings, most commonly nursing homes and colleges and universities. Additionally, in the residential sector several apartment and condominium buildings in the state have recently installed CHP systems.

A list of current CHP in MA, EEA’s installation database, is available at http://www.eea-inc.com/chpdata/States/MA.html

NERAC has conducted several case studies of CHP in Massachusetts.

CHP Market Potential

A 2006 study by Lauren Mattison of CHP potential in Massachusetts determined that the technical potential for CHP is greater than 4,700 MW at 18,500 sites throughout the state. Of these, the greatest opportunities will be found in commercial and institutional buildings, particularly office buildings, and in the relatively small size range of 50 to 500 kW generation units. Potential system sizes at all potential sites average 256 kilowatts (kW). This is not to say that no opportunities for larger systems exist—they do, and may provide significant benefits to end users and Massachusetts—but that the greatest market opportunity lies in smaller sizes.

Note: Technical potential is a measure of remaining market size that is only constrained by the technological limits - that is, the ability of the technology to match customer needs.

Electricity prices are generally high, favoring efficient CHP investment. Boston, for example, is a high-priced load pocket needing up to 500 MW of new capacity. However, NSTAR’s standby rates are an issue for those systems not entitled to exemptions from the rates (see below).

Policy & Overview

Massachusetts energy consumption is growing at roughly 1.2% annually, according to ISO-NE, and the 2005 summer peak was 12,110 MW. (2005 ISO-NE Regional System Plan.) Commercial load drives this growth; industrial demand has been in long term decline, with other sectors making up more than the difference. This observation is consistent with the CHP potential data reported above.

Incentives

The NERAC has prepared a database of incentives in the Northeastern states, including Massachusetts.

Renewable Portfolio Standard

Massachusetts established a Renewable Portfolio Standard (RPS) in 2002. Only CHP that is operated by renewable fuels, including landfill gas, is eligible to participate. For more information see DOER - Massachusetts Division of Energy Resources. All retail electric suppliers in the state obtain at least 1% of their energy supply from new renewable resources by 2003 ramping up to 4.0% by 2009 and an additional 1.0% each year thereafter. Eligible new renewables include fuel cells using renewable fuels, landfill gas, and low emission, advanced technology biomass. In the alternative, electricity suppliers can comply by submitting Alternative Compliance Payments (which in 2005 cost $53.19). A 2000 study prepared for MA DOER estimated economically viable renewable potential as 3,095 GWh by 2006, and 7,716 GWh by 2009. Although the greatest opportunities lie in wind development, the study identified significant near term opportunity (through 2006) in landfill gas, and longer-term opportunity in direct biomass combustion, which offers opportunity for some CHP applications. Note that on June 2, 2006 DOER announced its intention to revise the regulations for RPS.

Standby Rates

There is currently no standardized state policy regarding standby rates. However, in response to standby rates in the NSTAR utility, a new proceeding may be initiated by the DTE. NSTAR, covering the greater Boston area, has established standby rates. See the following link for details. Renewable technologies such as wind and solar, and small CHP systems under 250 kW, can qualify for exemption from the rates. Exemption also applies up to 1 MW if CHP serves less than 30% of onsite load. Other utilities may file for standby rates in the future. The Massachusetts Technology Collaborative has prepared a web site with information about rate issues affecting DG.

Interconnection Policy

Interim Uniform Interconnection Standards apply to all distributed generation. The interconnection standards are being reviewed through continuing stakeholder processes of the Massachusetts DG Collaborative through the Massachusetts DTE. Work continues on network standards through a formalized collaborative process addressing synchronous network interconnection, significant in the constrained and high priced Boston area. See this link for details.

Climate Action Plan

Details on the Massachusetts plan can be found here.

State Agencies

Several branches of the Commonwealth government are active in areas affecting CHP. Links to the following agencies can be found here.

DTE

Department of Telecommunications and Energy (MA DTE) is the primary energy regulator in Massachusetts, including setting rates.

DOER

The Division of Energy Resources (MA DOER) supports energy development in Massachusetts with the mission of implementing policies that ensure an adequate supply of reliable, affordable and clean energy for the businesses and residents of Massachusetts, and improving and streamlining energy regulation, promoting greater efficiency in all energy uses, reducing energy costs, and mobilizing energy education. One of DOER’s responsibilities is to oversee the Massachusetts RPS.

MTC

The MA Renewable Energy Trust seeks to maximize environmental and economic benefits for the Commonwealth’s citizens by pioneering and promoting clean energy technologies and fostering the emergence of sustainable markets for electricity generated from renewable sources.

The Policy Unit of the Renewable Energy Trust aims to increase the availability, use, and affordability of renewable energy by collaborating with interested stakeholders to address market and regulatory barriers facing renewable energy technologies and installations.

Utilities

Massachusetts Electric Utility Providers

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