Client: Clean Energy Group
Authors: Joshua R. Castigliego, Liz Stanton, PhD, Sagal Alisalad, and Eliandro Tavares
December 2021
On behalf of the Clean Energy Group, Researcher Joshua Castigliego, Senior Economist Liz Stanton, PhD, and Assistant Researchers Sagal Alisalad and Eliandro Tavares evaluated the value of winter reliability services and the opportunity to provide these services economically in New England using distributed battery storage. AEC finds that the value of winter peaking capacity services from distributed (customer-sited) resources is incorrectly assumed to be $0 in the battery program cost-benefit analyses that determine performance payments to battery storage owners.
The value of winter electric capacity is treated by electric distributors as distinct from that same value in summer, and it has been dubbed “winter reliability” to distinguish it from “summer capacity.” When calculating customer performance payments, summer capacity services are valued, but winter reliability services are not. In this report, AEC introduces a winter reliability metric defined as the assurance of adequate electric capacity during periods of critical need, called—following ISO-New England’s convention—capacity scarcity condition (CSC) events. AEC calculated a “winter reliability value” measured as the net dollar value to supply any given peak supply technology (i.e., gas peaker or large-scale battery storage) on a per kilowatt-hour (kWh) basis during a CSC period.