With forward capacity auction success, batteries are winning in New England

Excerpt from utilitydive.com

Clean energy advocates are celebrating a major energy storage milestone in New England: Plus Power, a San Francisco-based developer of grid-scale batteries, is building the two largest battery projects to date in the region — a 150-MW/300-MWh lithium-ion battery system at Carver, Mass., south of Boston, called Cranberry Point Energy Storage, and a 175-MW/350-MWh lithium-ion battery system in Gorham, Maine.

The size of these systems is impressive, but the real news in this announcement is the economic basis for the plants: Plus Power won two bids in the ISO New England forward capacity auction, meaning the developer is now on the hook to deliver on a seven-year capacity contract beginning in June 2024. The two huge battery projects are being built to fulfill those contracts.

The forward-capacity auction is the mechanism by which the independent system operator (ISO) — the organization that runs the regional electric grid — ensures there will be enough electricity to meet peak demand caused by extreme temperatures in summer and winter. Traditionally, fast-responding, small, fossil-fuel generators (mostly gas plants) have been paid — and paid well — to provide this service. But increasingly, newer, cleaner technologies, such as consumer demand response and battery storage, are displacing gas plants.