Introducing Our 2024 Clean Peak Standard Blog Series: Navigating Changes and Shaping the Future

This is the first blog in our “2024 Clean Peak Standard” blog series.

Chances are, 2024 will be a pivotal year for the Massachusetts Clean Peak Energy Standard (CPS). With nearly all of the policy’s elements implemented (with the notable exception of long-term contracting), there’s an opportunity (and a requirement) for the Department of Energy Resources (DOER) to conduct a comprehensive review of the program. The Clean Peak Market Outlook (CPMO) team will be here throughout, to help you navigate the shifting terrain and to provide analysis that enables you to advocate for change.

Why 2024 Matters for CPS Stakeholders

DOER’s 2024 program review is likely not just a routine check-in. Recommendations from the Charging Forward energy storage study and report and questions posed to stakeholders by DOER hint at the potential for a more strategic reevaluation, designed to enhance its effectiveness, mitigate ratepayer impacts, and ensure alignment with the Commonwealth’s climate commitments and existing clean energy programs. At a minimum, the CPS regulations require DOER to review the minimum standard, the alternative compliance payment, and the multipliers, which, together, are the very heart of the policy.

It’s no secret that the market is currently dramatically undersupplied. DOER’s 2021 RPS Compliance Report showed $35 million in CPS alternative compliance payments were collected for compliance year 2021, and we estimate this figure will be around $100m for 2023. For perspective, the highest ACP collections for Class I of the RPS (including solar carve-outs) ever was in 2021, at $37m. Furthermore, developers have expressed concerns with various elements of CPS (for example, through comments submitted through the Charging Forward study), particularly the challenge of financing storage on the basis of uncertain CPEC prices. [Shameless aside – addressing and mitigating this uncertainty is a large part of what CPMO is all about.]

Put these things together, and a reasonable person (which we could generally consider ourselves) would expect at least the consideration of significant changes to the policy. This potential for substantial change underscores the urgency for stakeholders to understand the evolving CPS landscape fully.

Our Blog Series: A Guide to Impactful Advocacy and Understanding

To navigate this pivotal year, we’re launching a blog series dedicated to unpacking the complexities of the CPS program and its implications for the future. Our series aims to equip developers, operators, investors, load serving entities ,and others with the knowledge they need to be more effective in their roles. Here’s what you can expect:

• Intro to CPS: We get it. CPS may not be front of mind for you. We’ll help you get back up the curve.
• Deep Dives into DOER’s 2024 Review: We’ll explore the nuances of the program review, highlighting changes, challenges, and opportunities for stakeholders to engage.
• Analysis of Relevant Studies: We expect additional studies (such as a value of distributed energy resources study from the Clean Energy Center) to be released this year. We’ll highlight them and discuss interactions with CPS.
• Review of Individual CPS Components: We’ll examine individual components of the program (e.g., long-term contracting, the ACP, etc.), discussing how they work, how they might change, and how they influence the overall market.
• Projections and Market Outlook: For our subscribers, we’ll provide analysis and projections of supply, demand, and prices that help stakeholders understand and prepare for potential changes.

Stay Tuned and Sign Up

We’re excited to embark on this journey with you. Keep an eye out for our next post (CPS 101) in the series. Keep an eye on our blog for the next post (CPS 101) in the series. In the meantime, you can learn more about CPMO here and use the form below to get other posts in this series delivered directly to your inbox. We hope you join us as we navigate the changes, challenges, and opportunities of 2024 together.

Next up in the Series: CPS 101.