Assessment of Storage Procurement Mechanisms and Cost-Effectiveness in Maine
The Maine Governor’s Energy Office (GEO) contracted Synapse and Sustainable Energy Advantage (the Project Team) to assess storage procurement options that meet the requirements of a 2023 state law. This law directs the GEO to evaluate program designs for procuring up to 200 megawatts (MW) of commercially available, utility-scale energy storage connected to Maine’s transmission and distribution systems, and to submit recommendations for review by the Public Utilities Commission.
The Project Team conducted both qualitative and quantitative analyses of these criteria, supplemented by stakeholder input gathered through a request for information and an open comment period issued by GEO, to assess procurement options for transmission- and distribution-connected storage.
The Project Team evaluated the cost-effectiveness of storage resources using a utility cost test and a jurisdictional societal cost test. The analysis demonstrates that most transmission- and distribution-connected storage options are likely to be cost-effective for ratepayers while also supporting the state’s emissions reduction goals.
Based on this analysis, the Project Team recommends that transmission-connected storage resources be procured through a competitive solicitation framework that includes an upfront incentive based on the resource’s energy capacity (i.e., kWh), paired with a performance payment tied to measured performance during critical hours that provide the greatest value to ratepayers.
Procurement of distribution-connected storage through a competitive solicitation framework can also benefit ratepayers if distribution benefits—such as avoided or deferred utility infrastructure costs—are realized. Therefore, it may be advantageous to procure distribution-connected storage using a framework that incorporates partial-tolling agreements, which combine ongoing payments to a third-party storage owner with utility-directed dispatch during critical hours.