The New Jersey Board of Public Utilities has released an updated Energy Master Plan that outlines the progress the state has made since the release in December 2011 of an original version of the plan.
This new document, dated December 2015, is an update to, not a rewrite of, the 2011 Energy Master Plan. The 2011 plan has provided long-term goals and implementation strategies flexible enough to respond to market changes and new information about the relative merit of competing energy technologies and strategies. It also helped guide decisions that affected the state’s environment, most notably New Jersey’s air quality.
In developing this update, BPU held three public hearings in August 2015. Following the public hearings, a draft EMP Update was completed. BPU released that document for public comment on Nov. 20, 2015.
New Jersey has made significant progress toward achieving a diverse portfolio of clean energy. Currently, more than 2,000 MW of new combined cycle natural gas generation units are under construction and all will be operational by 2015-2016 calendar years. This newer, more efficient generation will help maintain lower wholesale prices for electricity, reduce emissions, and maximize integration of variable and intermittent power produced by renewable energy sources.
Since 2011, nearly 100 MW of new Distributed Generation (DG) Combined Heat and Power (CHP), and fuel cell power generating facilities have been installed. “We recognize the importance of these DG technologies for decreasing dependence on the grid and increasing energy resilience – important lessons underscored by the experience from Superstorm Sandy,” said the plan. “Both of these technologies are critical to reducing emissions from our power sector. Combined heat and power facilities, MW for MW, yield approximately three times the carbon reduction benefit of photovoltaic (PV) solar and, in comparing the State’s investment in dollars per ton of CO2 displaced, CHP has received roughly 1/20th the financial support of PV solar. The development of financing programs through the Energy Resilience Bank (ERB), coupled with policy changes and other incentives in place since the 2011 EMP, will further assist in advancing progress toward this goal.”
The development of microgrid projects, including single building, campus-wide and advanced microgrids to address enhanced energy resilience will also help meet the goal for new DG, CHP, and fuel cells, the plan said. Two advanced microgrid studies funded by the U.S. Department of Energy (DOE) in partnership with BPU have been completed – one in Hoboken and one for NJ TRANSIT.
New Jersey’s in-state electricity generation by fuel type has changed significantly since 2011. In-state electricity generation is measured as the total retail sales, less the out-of-state imports. Notably, imports now only account for approximately 12% of New Jersey’s total electricity usage. Between 2011 and 2014:
- coal in-state generation was cut in half, from 8% to 4%;
- renewables doubled, from 2% to 4%;
- natural gas increased by one-third, from 33% to 44%; and
- nuclear held steady at an average of about 50% (the annual rate fluctuates due to scheduled and unscheduled outages).
With the drop in recent years in natural gas prices, electricity demand has increasingly been met by cleaner, in-state, combined cycle natural gas generation (NGCC) and less on imported power from facilities with higher, more polluting, emission profiles.
Plan notes that legal case over its in-state generation program is at the U.S. Supreme Court
The Long-Term Capacity Agreement Pilot Program (LCAPP) was key to drawing attention to building new, in-state power generation, the report said. The LCAPP law was challenged and in October 2013 a U.S. District Court held that the LCAPP law interferes with the Federal Energy Regulatory Commission’s ability to run a competitive capacity market and is, therefore, unconstitutional under the Supremacy Clause of the U.S. Constitution. The report pointed out that a comparable action by the Maryland Public Service Commission was overturned for federal preemption.
The U.S. Court of Appeals for the Third Circuit affirmed the District Court’s ruling. A petition for certiorari was filed by New Jersey with the U.S. Supreme Court. The denial of Maryland’s program was appealed to the Fourth Circuit, which upheld the ruling and likewise prompted a petition for certiorari. To date, the high court has not acted on New Jersey’s petition. However, in October 2015, the Supreme Court granted certiorari to review the Fourth Circuit’s determination that the Maryland Public Service Commission’s program is preempted by federal law.
The New Jersey plan said: “The Maryland Generation Order and New Jersey LCAPP Act are factually similar and share the same legal question of whether state-sponsored contracts for differences that require participation in the PJM capacity market are preempted by federal law. Thus, despite the Court neither granting nor denying petitions for certiorari of New Jersey’s LCAPP Act, the Court’s ruling in the Maryland case will determine the fate of LCAPP.”
Prior to the U.S. District Court’s ruling, three contracts were awarded under the LCAPP program for:
- Hess Corp.’s 655-MW plant in Newark (which, since its sale by Hess, is now known as the Newark Energy Center);
- NRG Energy’s 680.1 MW plant; and
- CPV Power Development’s 663.4-MW plant in Woodbridge.
As required under LCAPP, the three selected companies bid into PJM’s May 2012 capacity auction (requiring capacity to be available beginning June 1, 2015). The CPV Power and Newark Energy Center projects cleared the 2012 auction. NRG’s project, however, did not and, after also failing to clear in the 2013 auction, was canceled, the plan said. An additional project – LS Power’s 770-MW plant in West Deptford – which was not chosen under LCAPP but nevertheless bid into the 2012 PJM Capacity Auction – cleared the auction as well.
The Newark Energy Center is nearly complete, LS Power Plant (Phase 1) began construction in early 2012 and is now in service, with Phase 2 under construction with an expected operation date in 2016, and the Woodbridge Energy Center is under construction and is expected to be in service by early 2016. In addition, the 563-MW BL England repowering project, which includes an upgrade from coal to cleaner burning natural gas, awaits a decision on the alignment and construction of a new natural gas pipeline.
Transmission, gas pipeline capacity are key future priorities
The plan said that New Jersey will continue to encourage new in-state generation, especially in areas of high congestion. The state will continue to work to assist in reducing financial, regulatory, and technical barriers and provide for opportunities for new entry. The state will continue its evaluation and analysis of New Jersey’s electric capacity needs as well as other issues associated with transmission planning to identify areas of congestion, inordinately high electricity prices, and the proper functioning of the power market. This includes enhancing the capacity of the natural gas pipeline infrastructure to take advantage of low natural gas prices to assist in lowering electricity prices.
One goal of the 2011 plan was to develop 1,500 MW of Combined Heat and Power (CHP) and Distributed Generation (DG). Distributed Generation includes on-site generation from both renewables, such as solar, wind and biomass, and from conventional fossil fuel facilities. Combined Heat and Power facilities include district power plants that produce electricity while capturing and making use of thermal energy, as well as smaller units for on-site energy needs of a specific facility. The specific goal identified DG to reduce peak and included development of 1,500 MW of new CHP by 2021.
The total new DG capacity installed since 2011 is over 1,300 MW in over 31,000 facilities statewide. This includes CHP, fuel cells, wind and solar. Development of DG in New Jersey has been dominated by solar. To qualify for Solar Renewable Energy Certificates, all New Jersey solar must be connected to the distribution system and would qualify as DG, whether used on-site or as grid supply.
New Jersey has almost 3,000 MW of CHP which is one of the highest concentrations of CHP in the country, but only 10% is classified as DG. Less than 100 MW of new CHP has been installed since 2011. Of all the DG systems promoted and advanced by New Jersey, including solar, CHP is the most energy efficient and cost effective in terms of emission reductions. Because of its ability to run continuously, it also improves and enhances local energy resiliency and reliability and can provide the basis for a microgrid.