Peak Energy

Sep 13, 2023

A battery storage development is replacing a fossil-fuel-burning power plant in western Massachusetts, providing a model that supporters say could be emulated elsewhere. The project is only financially viable, however, because of a unique state incentive program designed to cut emissions related to peak electricity demand. Power company Cogentrix is developing the facility at the site of the former West Springfield Generating Station, which was shut down in June 2022. The $80 million project includes 45 megawatts of storage that will be able to send electricity to the grid for up to four hours. It is expected to come online sometime in 2025. “This will be really big and set a nice precedent for transitioning from fossil fuel to storage and renewables,” said Rosemary Wessel, founder of No Fracked Gas in Mass, a program of the Berkshire Environmental Action Team. Subscribe to receive Canary's latest news This transition is happening at a time when there has been increased discussion about the role of so-called ​“peaker plants” — facilities that are only called upon at times of peak power demand. Peakers are generally older facilities that emit more greenhouse gases than other plants, and the power they generate is more expensive. Utilities have said peaker plants are necessary to ensure a reliable electricity supply in emergencies and times of high demand. Wessel’s organization and other environmental groups, however, argue that storage technology, especially when paired with renewable generation, can also meet these needs. They contend no new peakers should be built, and old ones should be taken out of use as quickly as possible. “These are really the low-hanging fruit for starting to take existing fossil fuels off the grid,” said Wessel, whose group has been pushing power companies that own peaker plants in western Massachusetts to consider transitioning to renewable energy generation and battery storage. The West Springfield story The plan for the West Springfield plant came about when longtime energy developer Chris Sherman, vice president of regulatory affairs at Cogentrix, wanted to take his work in a new direction. He has a background in clean energy — he was a project development manager for the ill-fated Cape Wind offshore wind plan — and was interested in returning to this work. His employer put him in touch with Wessel, who had reached out to the company about the future of the West Springfield Generating Station . The plant first started generating power in 1949, initially burning coal. In the 1960s, it was converted to an oil-burning plant, and in the 1990s the ability to burn natural gas was added. It was officially shut down in June 2022. Once power plants shut down, the land they’re built on is often hard to redevelop, Sherman said. However, the properties are already surrounded by the infrastructure needed to send power to the grid, so building battery storage and renewable energy installations on these sites is a promising strategy. Sherman and Wessel met in June 2021, and it quickly became clear that their goals were aligned. The two began working together to create plans for the site, which had not yet closed officially. Their collaboration, Sherman said, has made it easier to bridge the perceived gap between the logistical, technological and financial aspects of his work, along with the environmental and social concerns of community members. Get Caught Up “If I were to just call people and say ​‘energy developer,’ they might not be willing to enter into an objective discussion,” Sherman said. Wessel ​“has done an incredible job at generating interest and then facilitating communication in the broader stakeholder community.” The plan that emerged is a pragmatic one that attempts to satisfy environmental goals while also dealing with the financial realities of the energy market. The initial plan calls for charging batteries during times when demand and emissions are lower, and then discharging at times of higher demand. Cogentrix hopes to eventually install solar panels to make the energy it stores even cleaner and cheaper. The project is now in the early permitting stages, with the goal of beginning site work over the coming winter and installing battery containers in the spring. West Springfield leaders have expressed support for the project and the chance to put the property, formerly the largest taxpayer in the city, back on the tax rolls, noting that revenue took a hit when the plant closed last year. They are also pleased to see emissions-free batteries and solar panels take the place of the pollution the former plant created. “I look forward to the potential redevelopment of this site,” said West Springfield Mayor William Reichelt. ​“Though we are in the early stages of what’s possible…any improvement to the site will certainly benefit the community and the region.” Proving the potential Because the plan for the site represents a new sort of energy development, existing revenue models don’t necessarily apply. Sherman had to work hard to convince investors that the novel approach will turn a profit. There is enough room on the site to develop about 100 megawatts of storage, but his investors are only willing to back 45 megawatts until they see convincing results, he said. A small amount of revenue will be made by charging batteries during periods when electricity prices are lower, such as overnight, and then selling the power back to the grid and higher-demand, higher-priced times. Another block of money will come from participation in the regional capacity market, in which power sources are paid for committing to be available to provide electricity at some future point. Additionally, almost half of the project’s revenue is expected to come from the Massachusetts Clean Peak Energy Standard , an incentive system unique to the state. The standard, which took effect in 2020, offers incentives to clean energy generators and battery storage owners that discharge power into the grid at times of peak demand, helping to lower the demand on power plants. Without that incentive, the project ​“would not be viable,” Sherman said. Wessel and Sherman both express hope that this project might be the beginning of a trend toward locating storage at old power plant sites. Cogentrix is looking at potential project sites in Maine, Maryland and New Jersey. In these cases, the power plants have not yet been retired, though Sherman said the plans should still reduce emissions. For the concept of replacing peakers with batteries to really catch on, states will need policies that add incentives such as Massachusetts’ Clean Peak Energy Standard to encourage the dispatch of stored power at peak demand times, Sherman said. State-backed policies will help convince backers that such projects are financially feasible. “What I need to demonstrate to investors,” he said, ​“is that we can have predictable, durable, long-term revenue streams.”