New Jersey, A State with a Plan
New Jersey, the Garden State, is not known for its sunshine or its wind, but the state government hasn’t let that stop it from becoming a renewable energy leader. Its northern section lives in the shadow of New York City while its southern section is dominated by Philadelphia. But when it comes to developing and implementing a successful energy plan and a consequent greenhouse gas reduction plan, New Jersey is the Big Dog!
What separates New Jersey from its neighbors is its Energy Master Plan (EMP). The plan has very specific goals and, like a big dog, it has the teeth to achieve them. There are 5 targets in the EMP (for the complete document on NJ’s EMP (click here):
- Maximize energy conservation and efficiency to achieve a 20% reduction in energy consumption by 2020. This corresponds to reducing consumption in 2020 by 20 Million KWH.
- Reduce peak demand for electricity by 5700 MW by 2020.
- Provide 30% of the state’s electricity needs by 2020 with renewable energy.
- Develop a 21st century energy infrastructure.
- Invest in innovative clean energy technologies and businesses to stimulate the industry’s growth in NJ.
The EMP will require $33 Billion in investments, but the plan also projects a savings for NJ citizens of $6.4 Billion in 2020 alone and another $30 Billion over the next 10 years.
Click to view Renewables Map
Currently, NJ has a modest, but rapidly growing renewable energy portfolio. It has just over 4,000 solar installations (you can see the latest number on the NJ Clean Energy Program site), generating about 95 MW of solar power and about 7.5 MW of wind power (at an Atlantic City wastewater treatment facility). Some of the larger photovoltaic installations include a 2.4 MW rooftop solar system on the Atlantic City Convention Center and a 1.5 MW system at Rutgers University, the Livingston Campus. JC Penny and Johnson & Johnson are some local companies that have over 1 MW of solar installed in NJ (see B-GC Renewable Energy Maps). In wind, NJ lags most neighboring states, but for solar the 95 MW installed makes it a leader only eclipsed by California.
Even though NJ has come a long way in solar in the past 8 years (in 2001 NJ had only 6 solar installations), to achieve its 30% goal by 2020, it will have to grow a lot faster in the future. For the renewable energy portion of the EMP, NJ, in less than 11 years, will have to achieve
1) 1,800 MW of solar, a 1,705 MW increase
2) 200 MW of onshore wind
3) 3,000 MW of offshore wind, with 1,000 MW of offshore wind by 2012
4) 900 MW of biomass or biofuels
5) 50 MW for ‘new and emerging technologies’
The pace for installing solar in NJ will need to accelerate from about 10 MW/year installed to about 160 MW/year during the remaining 11 year period. This will require some large projects going forward. NJ recently announced plans for adding 145 MW of solar output by 2013 at a cost of $515 M. One of the approved projects in this plan is to mount 40 MW of solar panels on 200,000 utility poles (Read More). This is the type of innovative thinking that will be needed for NJ to achieve these ambitious goals.
According to Jared Haines, President of Mercury Solar Systems, ‘New Jersey’s success is related to its issuance of SRECs’ (solar renewable energy certificates). An SREC is a tradable certificate issued by the state of NJ each time 1 MWH of solar energy is generated. The certificates may be purchased by electricity suppliers who can use them to achieve their portion of the NJ Renewable Portfolio Standard (RPS). Purchasing the SRECs are a lower cost alternative than paying the penalty called the Solar Alternative Compliance Payment (SACP) imposed for failure to meet the RPS. When sold, the owner of the solar panels that have earned the SREC can generate an income stream for the next 15 years. SRECs are traded in a competitive market but do not have guaranteed pricing.
While solar growth plans are aggressive, the wind power plans are even more so. They assume offshore wind will be approved and installed quickly. Two offshore wind farms are currently in the planning stage. One is referred to as the Garden State Offshore Wind Farm and is expected to generate 350 MW 16 miles off the coast of South Jersey near Avalon. The other, the Delaware Bay Offshore Wind Farm is planned to generate 382 MW (locations for both are shown on our renewable energy maps).
Another part of the EMP is to develop at least 900 MW of biofuels and biomass by 2020. The biofuels and biomass would come mostly from solid waste. By converting the solid waste to energy, landfill development and the consequent release of methane, a virile greenhouse gas, will be reduced. The plan will be for biofuels and biomass to be added to the RPS in order to provide incentives for developing the technologies needed.
Another incentive program that New Jersey offers for solar, wind and biofuels is called the Renewable Energy Incentive Program (REIP). This program offers an upfront rebate to reduce the initial cost of installing renewable energy programs. Commercial solar projects exceeding 50 KW are ineligible for this program but can take advantage of the SREC system.
The drive for energy conservation and energy efficiency is a large part of New Jersey’s EMP. It is estimated that $11 B of the $33 B total for the program will go towards achieving the goals of energy conservation, energy efficiency and reduction of peak demand. NJ expects to focus on improving the efficiency of its existing 3.7 million buildings to achieve 75% of its 20 Million KWH goal. The balance would come from new buildings and new appliances.
To achieve the energy reduction goals in existing buildings, NJ will revise its utility rate structures to ensure utilities are encouraged to foster energy savings as they are concerned that current policies reward utilities when more energy is consumed. Like its renewable energy policy, the new EMP requires a huge acceleration of energy savings programs. By 2020, NJ expects to improve the efficiency of all its 3.7 million buildings compared to addressing 500,000 buildings total in the last 7 years.
To improve the efficiency of new construction, NJ plans to alter its building codes to ensure the 30% efficiency improvement is achieved. Further, it is planning to issue specific goals for percentages of net zero carbon buildings (buildings that do not cause the release greenhouse gases).
New Jersey has set admirable goals for energy reduction, and if it achieves these goals it will likely be far ahead of the rest of the country in supporting Waxman-Markey bill goals for greenhouse gas reductions. Interestingly, New Jersey’s primary motivation is to reduce its need for new power plants as old ones are retired. New Jersey, based on recent experience, expects these policies will have a good economic return to its citizens. Greenhouse gas reductions are a side benefit. The seeds the state of New Jersey is planting in its ‘Garden’ are likely to bloom, putting a new shine on the state’s nickname, and setting an example for other states and the world to follow. That is what you would expect from the Big Dog.
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