Market Intel
ISO-NE
Market Overview
ISO-NE oversees the operation of New England’s power grid, ensuring reliability, administering wholesale electricity markets, and planning for the future needs of the grid. The region includes six states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
To-date, batteries have played a marginal role, with only ~90MW of short-duration energy storage available. Utility-scale solar and wind generation are also fairly limited, representing only ~4% of the fuel mix. However, state-level clean energy targets, storage procurement targets, and increasing electricity demand imply that growth is on the horizon.

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56%
Fuel mix expected to be from renewable electricity production by 2040 -
10GW+
Brown generation retired or expected to be retired in the near-term -
0.4GW
Energy storage capacity as of late 2024
ISO-NE has demand and state-level price support mechanisms that should contribute to a compelling case for storage developers and operators.
Storage assets qualify as Continuous Storage Facilities (CSFs) in ISONE, allowing them to participate across energy and ancillary service markets.
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Alternative Technology Regulation Resource (ATRR)
Provides fast-response regulation services to balance supply and demand on the grid.
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Non-regulation capable generator
Allows the asset to participate in the energy market similar to generation assets, opening the door to energy arbitrage.
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Dispatchable Asset Related Demand (DARD)
A load that can be adjusted remotely by the ISO based on its ability to respond to dispatch instructions.
State-Level Breakdowns
Targets and price support mechanisms by state vary.
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- Storage procurement target:
1GW by 2025 - Incentive/Procurement mechanisms:
CPS, SMART - Renewable target:
80% by 2050
- Storage procurement target:
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- Storage procurement target:
- 650 MW by 2027
- 1 GW by 2030
- Incentive/Procurement mechanisms:
DEEP (RFP) - Renewable target:
100% by 2040
- Storage procurement target:
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- Storage procurement target:
- 300MW by 2025
- 400MW by 2030
- Renewable target:
100% by 2050
- Storage procurement target:
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- Storage procurement target:
- 90MW by 2026
- 195 by 2028
- 600MW by 2033
- Renewable target:
100% by 2033
- Storage procurement target:
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Renewable target:
25.2% by 2025 -
Renewable target:
90% by 2050
Market products
Energy storage is able to participate in Energy, Ancillary Services, and Capacity markets.
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Energy
Currently there are somewhat limited arbitrage opportunities due to minimal price variance between Day-Ahead and Real-Time average hub prices.
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Ancillary Service (AS)
Notably, there is no Day-Ahead AS market in ISO-NE, but it is in the 2025 budget, so we may see changing in the coming year.
Forward Capacity Market
Ensures the ISO will have sufficient resources to meet future demand.
- Sold in annual auction, 3 years in advance of the period for which capacity will be supplied (e.g., Feb 2024 auction for 2027/2028 year)
How to qualify >> - This past cycle, 6% of procured capacity came from energy storage, to be available in 2027/2028
- Capacity prices will be rising to ~2.60-2.70/kW-month until 2027/28, then again to $3.58
ISO-NE is considering transitioning to a “prompt seasonal capacity market,” which would allow the ISO to better align with seasonal needs (ie. we may see higher capacity needs and prices in winter months). This would also mean new storage assets have the opportunity to participate sooner!
Market Opportunities
With robust renewable energy targets and long winters, ISO-NE is going to need sufficient storage capacity to support reliability. A few factors are at play here.
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Electrification of transportation and heating is driving substantial increases in electricity demand, creating a critical need for flexible resources like storage to manage surges and peak loads.
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As ISO-NE shifts to a winter-peaking grid, energy storage can capture revenue opportunities during seasonal demand surges, balancing summer and winter peaks for year-round profitability.
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With increasing reliance on intermittent solar and wind as the transition to clean energy progresses, storage will play a vital role in ensuring grid stability during prolonged periods of low renewable output.
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Market changes like Pay-for-Performance (PFP) reward storage operators for rapid and reliable responses during capacity shortages, offering valuable revenue adders.
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State-level programs like Clean Peak Standard (CPS) and federal incentives like the Investment Tax Credit (ITC) are significantly improving the economics of deploying energy storage in ISO-NE.
“Over the next 20 years, we expect that renewable resources will displace natural gas as the main source of electricity generation in the region.”
— 2024 ISO-NE Regional Electricity Outlook
State-level price support mechanisms
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Massachusetts DOER Clean Peak Standard
This program provides incentives to energy storage systems that deliver electricity during peak demand periods, helping reduce reliance on fossil fuels during critical times.
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Massachusetts SMART Program
The Solar Massachusetts Renewable Target (SMART) program offers additional financial incentives for pairing solar installations with energy storage, encouraging integrated renewable and storage projects.
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Connecticut DEEP Energy Storage RFP
Connecticut’s Department of Energy and Environmental Protection (DEEP) issues Requests for Proposals (RFPs) to procure energy storage projects, supporting the state’s clean energy goals and grid reliability.
Deep Dive
Maximizing project value under CPS
During the project evaluation and development phase, it is critical to account for CPS operating constraints and CPEC awards in your modeling. This will provide an accurate picture of energy output, and potential project returns, so you can design the most advantageous scenario.
Once assets go live, accurate price and peak load forecasts along with optimization software that enable operators to discharge into peak hours will be even more important.
Maximizing both the incentives and the wholesale opportunity
Maximizing both the incentives and the wholesale opportunity