Energy Storage Benefit-Cost Analysis

Prepared on behalf of the Clean Energy States Alliance

Authors: Bryndis Woods, PhD, Sachin Peddada, Elisabeth Seliga, Chirag Lala, Eliandro Tavares, Gabriel Lewis, Tsanta Rakotoarisoa, Elizabeth A. Stanton, PhD

Contributing Editor: Todd Olinsky-Paul, Clean Energy States Alliance

AEC staff prepared a report that provides a framework for state energy agencies contemplating a benefit-cost analysis (BCA) for battery storage on behalf of the Clean Energy States Alliance. AEC’s battery storage BCA framework provides guidance for state energy agencies preparing to conduct cost-effectiveness evaluation for battery storage, including information regarding: cost-effectiveness tests, discount rates, benefits, costs, sensitivity analyses, and stakeholder engagement.

Link to Report

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Evergy Kansas IRP Comments

Client: Sierra Club

Authors: Senior Researcher Tyler Comings and Researcher Joshua Castigliego

Senior Researcher Tyler Comings and Researcher Joshua Castigliego assisted the Sierra Club in comments on the Evergy Kansas Integrated Resource Plan (IRP). AEC had several criticisms of the Evergy plan, including that the company 1) failed to choose one of its alternative plans that was lower-cost and had accelerated coal unit retirements; 2) failed to conduct true optimization of coal unit retirements; 3) inflated the costs of new renewable resources; and 4) failed to consider any battery storage.

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Net Emissions Savings Benefit for a Battery Storage Facility in Wendell, Massachusetts

Image source: Borrego

Client: New Leaf Energy, Inc.

Authors: Joshua R. Castigliego, Chirag Lala, and Liz Stanton, PhD

August 2022

On behalf of New Leaf Energy, Inc., Researchers Joshua Castigliego and Chirag Lala, and Senior Economist Liz Stanton, PhD conducted analysis estimating the net change in carbon dioxide (CO2) emissions resulting from New Leaf Energy’s proposed battery storage facility located in Wendell, Massachusetts. AEC estimated net emission savings of this proposed battery storage project as the sum of “positive” CO2 emissions savings (i.e., reduced emissions) from the electric grid due to charging and discharging at specific times and “negative” CO2 emissions (i.e., increased emissions) due to land-use conversion from forestland to grassland. Combined these two effects result in substantial net emissions savings (i.e., reduced emissions) resulting from the proposed New Leaf Energy facility.

The proposed battery facility at the Wendell site would draw power from the grid during periods in which clean, renewable energy sources are a high share of total New England generation, and discharge energy at times when mostly fossil-fuel-powered generators are displaced by this added energy. By charging using low-emission generation and displacing fossil fuel generation while discharging power, new battery resources result in lower electric grid emissions.

This publication is an update to a study originally released in November 2021 (AEC-2021-11-WP-01).

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Energy Storage for Winter Grid Reliability: How Batteries Became the Low-Cost Solution for Power Assurance in Massachusetts

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.

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Media Coverage

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Massachusetts Non-Energy Benefits of Battery Storage

Client: Clean Energy Group

Authors: Bryndis Woods and Liz Stanton, PhD

April 2019

AEC-2019-04-WP-01

On behalf of the Clean Energy Group, Researcher Bryndis Woods and Clinic Director and Senior Economist Liz Stanton, PhD, prepared an Applied Economics Clinic white paper that presents the results of a preliminary assessment of seven non-energy benefits of battery storage. Currently, non-energy benefits of storage are not included in cost-benefit calculations for storage in Massachusetts—which has the same effect as assuming they have no value. We provide preliminary estimates of the value of seven non-energy benefits as a starting point for a discussion of how best to fully measure the advantages to Massachusetts of battery storage: avoided power outages, higher property values, avoided fines, avoided collections and terminations, avoided safety-related emergency calls, job creation, and less land used for power plants.

This white paper is part of a series of AEC publications on behalf of Clean Energy Group analyzing costs and benefits of battery storage in Massachusetts.

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Updated Massachusetts Battery Storage Measures: Benefits and Costs

Client: Clean Energy Group

Author: Liz Stanton, PhD

April 2019 Update

AEC-2019-04-WP-02

On behalf of the Clean Energy Group, Clinic Director and Senior Economist Liz Stanton, PhD, prepared an update to the Applied Economics Clinic’s July 2018 white paper on the same topic. Dr. Stanton assessed the cost-effectiveness of battery storage in Massachusetts, using the Massachusetts' efficiency program administrators' benefit-cost ratio methodology and found that both single- and multi-family batteries are found to be cost effective.

This white paper is part of a series of AEC publications on behalf of Clean Energy Group analyzing costs and benefits of battery storage in Massachusetts.

Link to White Paper Update

Link to Project Page

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Massachusetts Battery Storage Measures: Benefits and Costs

Client: Clean Energy Group

Author: Liz Stanton, PhD

July 2018

AEC-2018-07-WP-02

On behalf of the Clean Energy Group, Clinic Director and Senior Economist Liz Stanton, PhD, prepared an Applied Economics Clinic white paper. Dr. Stanton assessed the cost-effectiveness of battery storage in Massachusetts, using the Massachusetts' efficiency program administrators' benefit-cost ratio methodology and found that both single- and multi-family batteries are found to be cost effective.

This white paper is part of a series of AEC publications on behalf of Clean Energy Group analyzing costs and benefits of battery storage in Massachusetts.

Link to White Paper

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Massachusetts' Clean Energy Policy Overview

Client: Barr Foundation

Authors: Bryndis Woods, Nina Schlegel, and Liz Stanton, PhD

June 2018

On behalf of the Barr Foundation, Researchers Bryndis Woods and Nina Schlegel, along with Clinic Director and Senior Economist Liz Stanton, PhD, prepared an Applied Economics Clinic policy brief which detailed Massachusetts’ history of leadership in clean electric-sector policies. Beginning in the 1980s, through the electric “restructuring” laws and regulations of the 1990s, and then the 2008 Green Communities Act and Global Warming Solutions Act, Massachusetts policy-makers have laid the groundwork for today’s efforts to reduce greenhouse gas emissions while adding diversity to New England’s electric generating resources.  The 2018 ‘Act to Promote a Clean Energy Future’ continues this work, calling for accelerated renewable energy requirements, offshore wind and battery storage targets, and less stringent limits on rooftop solar installations.

Link to History of MA Energy Sector Policy Brief

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