Clean Energy Standard

Summary

The Clean Energy Standard (CES) was created to assist in reaching Massachusetts’s greenhouse gas emissions reduction goals adopted pursuant to the Climate Protection and Green Economy Act. The CES requires retail electricity sellers to demonstrate on an annual basis the use of clean energy for the generation of specific electricity sale percentages.

Clean Generation Resources

The CES allows two types of clean generation resources, those from existing units and those from new units. Clean existing generation refers to existing nuclear and hydroelectric generating units that have a capacity of more than 30 MW, started operations before 2011, and are located in Massachusetts (or in a jurisdiction that has exported at least a net annual amount of 4 million MWh to Massachusetts in at least two years from 2001 to 2016). For any individual clean existing generating unit, the output in a given calendar year cannot exceed 2.5 million MWh. Clean generation units refer to those that have received a CES statement of qualification from the Department of Energy Resources (DOER) or a Renewable Portfolio Standard (RPS) statement of qualification, with an operation start date after 2010. 

Eligible clean generation include RPS Class I resources, such as: solar photovoltaics (PV); solar thermal electric energy; wind energy; ocean thermal, wave, or tidal energy; fuel cells utilizing renewable fuels; landfill gas; energy generated by certain new hydroelectric facilities, or certain incremental new energy from increased capacity or efficiency improvements at existing hydroelectric facilities; low-emission advanced biomass power conversion technologies using fuels such as wood, by-products or waste from agricultural crops, food or vegetative material, energy crops, algae, biogas, or liquid biofuels; marine or hydrokinetic energy; and geothermal energy.

Minimum Standard

The CES’s minimum standard is the mandated minimum percentage of electrical energy sales with clean generation attributes and clean existing generation attributes. Integrated into the minimum standard is a separate minimum percentage for clean existing generation units (CES-E). In 2021 and 2022 the percentage requirement for CES-E was 20%, while the requirement for years 2023 to 2050 is determined by dividing 25% by the percentage provided by the DOER pursuant to the total electrical energy sales to end-use customers (reported via annual compliance filings) for the year four years before the calendar year for which the percentage requirement applies, rounded to the nearest percent. The following chart lists the total minimum standard percentages from 2018 to 2050 (and thereafter):

Clean Energy Generation Attributes

To emblematize electrical energy output from eligible clean generation units and clean existing generation units, these categories can use clean and clean existing generation attributes as compliance, respectively. Clean generation attributes produced in either or both two prior compliance years can be used.

Alternative Compliance Payment

In lieu of providing clean generation attributes, alternative compliance payments (ACPs) can be made in the form of CES and CES-E alternative compliance credits. The CES ACP rate in dollars was 0.75 times the rate calculated annually by the DOER for years 2018 to 2020, 0.50 times the rate calculated annually by DOER for the year 2021, and $35/MWh for years 2022 through 2050. The CES-E ACP rate in dollars was 0.10 times the rate specified by DOER for the year 2021 and $10/MWh for the years 2022 through 2050. To find the ACP rate for the current compliance year go to the DOER’s annual compliance information website page.

Compliance

Retail sellers are required to submit annual compliance filings to document their compliance progress. The annual form must include the following information: the total electric energy sales to end-use customers; electric energy sales to end-use customers; the alternative compliance credit; attributes retained, among others.