Four municipal utilities in Massachusetts, along with developer Lightshift Energy, are collaborating on a program that could yield up to 50 MW of battery projects, potentially saving these electric companies over $200 million.
Four utility-scale energy storage projects in Massachusetts have successfully sold their tax credits from the Inflation Reduction Act for nearly $10 million. These battery energy storage systems, with capacities ranging from 9 MWh to 22 MWh, will provide various services to the participating municipal utilities.
The batteries were installed as part of a strategy by Lightshift Energy, in partnership with the Massachusetts Municipal Wholesale Electric Company (MMWEC) and its member utilities. Lightshift Energy estimates that these installations could save municipalities more than $200 million.
The batteries will be utilized to alleviate peak demand on the grid and for arbitrage—charging during periods of lower electricity costs and discharging during higher-cost times. Since at least 2018, grid patterns in the New England independent system operator region have regularly displayed a “solar duck curve.” This phenomenon illustrates how solar energy production peaks during the day when demand is at its lowest, presenting opportunities for energy storage to take advantage of price arbitrage. The region’s Clean Peak and Connected Solutions programs are designed to incentivize energy storage to help reduce demand peaks.
One of the batteries, a 3 MW/9 MWh system produced by Trina Energy Storage, was installed for the Paxton Municipal Light Department and is directly connected to a local substation. This installation is projected to save the utility more than $10 million in energy costs over the duration of the contract. The largest of the four projects, a 5 MW/22 MWh system, was completed in Holden, Massachusetts, in August. Another project in Wakefield, which combines grid backup power with additional energy services, is expected to be finished by summer. The town’s Energy Park website is actively tracking the installation progress and provides updates, including details on a 2.5 MW backup gas generator.
Basis Climate, a company specializing in monetizing tax credits, facilitated the sale of these tax credit packages and identified a buyer. They possess extensive experience in documentation for both small and large transactions, having completed tax credit transfers worth hundreds of millions of dollars, with values ranging from $355,000 to $100 million. As part of the technical verification process, Basis Climate confirmed that contractors working for Lightshift Energy complied with wage requirements, as these projects exceeded 1 MW (AC) in capacity, necessitating adherence to prevailing wage and apprenticeship labor standards to qualify for the full tax credits. Basis Climate collaborated with Dili, which used an AI-powered diligence solution to verify compliance with wage laws.
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