New Jersey Advances Clean Energy Agenda

New Jersey advanced several of the Murphy administration’s clean energy goals during June 2019. Over the past month, the state released a draft of its revised Energy Master Plan (EMP), approved the Ocean Wind offshore wind project proposed by Ørsted, and released a detailed analysis on energy storage development in New Jersey.

The state’s 2018 clean energy bill, together with Governor Phil Murphy’s Executive Orders No. 8 and 28, set forth an aggressive implementation schedule to achieve the state’s clean energy goals. These include

  • the development of 600 megawatts (MW) of energy storage by 2021;
  • the development of 2,000 MW of energy storage by 2030;
  • the development of 3,500 MW of generation from offshore wind projects by 2030; and
  • the conversion of the state’s energy production profile to 100% clean energy sources by 2050.

The draft EMP is intended to be the overall blueprint to attaining the state’s goal of 100% clean energy by 2050. The EMP is subject to further review and the New Jersey Board of Public Utilities (BPU) is accepting written comments on the draft plan. The BPU will also be holding public stakeholder meetings in July, August, and September.

The draft EMP contains seven primary strategies, which include accelerating the deployment of renewable energy and distributed energy resources (DER); maximizing energy efficiency and conservation and reducing peak demand; modernizing the state’s electricity grid and utility infrastructure; and expanding the state’s clean energy innovation economy.

The BPU is required to initiate a proceeding in the next six months to establish a process and mechanism for attaining the state’s storage goals. This process is expected to result in rules providing for utility solicitations of energy storage and other non-wire solutions to modernize and strengthen New Jersey’s energy grid. The BPU will also conduct two additional solicitations of 1,200 MW of offshore wind generation by 2022. New Jersey’s utilities will play a central role in advancing wind and storage in the state since the utilities will likely be the primary entities acquiring such wind and storage generation/capacity. The draft EMP also calls for the development of new and innovative utility rate designs, such as Time of Use rates to reduce peak demand, new electric vehicle (EV) tariffs to manage EV charging, and the development of new tariffs to effectively manage demand and load shifting.

The BPU already promulgated rules to provide for the development of offshore wind in New Jersey and approved the Ocean Wind project on June 21, 2019. The BPU selected the proposed 1,100 MW Ocean Wind Project from among four potential combinations of offshore wind projects that included proposals from two other offshore wind developers. In approving the Ocean Wind project, the BPU highlighted Ocean Wind’s likelihood of successful commercial operation given Ørsted’s track record in offshore wind development, its success in identifying and obtaining several required permits, the expected cost to ratepayers (on a monthly basis, $1.46 for residential customers, $13.05 for commercial customers, and $110.10 for industrial customers), and expected positive economic benefits to New Jersey, including the creation of dozens of jobs in the state.

As the first step in establishing a roadmap to achieve New Jersey’s ambitious energy storage targets, the BPU commissioned a technical analysis of energy storage options for New Jersey: the Energy Storage Assessment (ESA). The technical analysis of the ESA highlighted the extensive value propositions for New Jersey arising from a wide array of energy storage technologies, focusing on resilience benefits in the face of increasingly severe weather along the state’s coastline and increased renewable energy hosting capacity. The ESA also found that energy storage can play an important role in providing grid stabilization for offshore wind projects and electric vehicle (EV) charging.

While the ESA found that energy storage can serve many applications, it concluded that very few are attractive to investors without financial incentives. The ESA estimated that New Jersey’s near-term energy storage target of 600 MW by 2021 will require $140–$650 million in incentives if energy storage is paired with solar photovoltaic systems and could mean subsidies of up to $1 billion for standalone installations. As a result, the ESA recommended a portfolio of small pilot programs for various types of energy storage applications with incentives for resiliency, renewable energy integration, and EV deployment. The ESA also posed several key policy questions and recommendations, including the development of a clear vision on what new energy storage deployments in New Jersey should accomplish.

The BPU will need to carefully consider the costs to ratepayers set forth in the ESA as it sets priorities for energy storage deployments in New Jersey. The BPU will likely study these issues in more detail later in the year when it establishes a mechanism for achieving the clean energy bill’s storage goals.

 

View source: https://www.jdsupra.com/legalnews/new-jersey-advances-clean-energy-agenda-16593/

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