energy

Solar and Wind are Keys to NJ’s Lofty Renewable Energy Goals

Both sectors continue to breed optimism as thousands of additional megawatts of energy are planned over the next decade.

Gov. Phil Murphy’s Energy Master Plan, which was officially unveiled in January of 2020, set a goal of having 100% clean energy in the state by 2050. When the governor signed Executive Order No. 100, which directed the Department of Environmental Protection (DEP) to make sweeping regulatory reforms, branded as Protecting Against Climate Threats (PACT), to reduce emissions and adapt to climate change, New Jersey became one of the most aggressive states in the nation when it came to planned climate change regulations.

The state’s renewable energy goals are well documented as being ambitious, and the lofty benchmarks set forth by the current administration have pushed players in the solar and wind industries to step up their game when it comes to the renewable energy projects and initiatives they implement over the course of the next decade.

Offshore Wind

A key component of Murphy’s 100% clean energy goal is installing 7,500 megawatts (MW) of offshore wind capacity by 2035. That capacity will need to be achieved by the construction of wind farms (a collection of individual wind turbines) off the state’s coast.

In 2019, the New Jersey Board of Public Utilities (BPU) announced Ocean Wind 1, an offshore wind energy project in which Danish power company Ørsted, with support from Public Service Enterprise Group (PSEG), will develop a 1,100 MW wind farm 15 miles off the coast of Atlantic City that is slated to power more than half a million homes in the state. Ocean Wind 1 is expected to provide its first power in late 2024.

This past June, the BPU announced two more offshore wind projects: the 1,148 MW Ocean Wind 2 (which will also be developed by Ørsted) and EDF, and Shell’s 1,510 MW Atlantic Shores. The two projects will combine to create an estimated 7,000 jobs, generate $3.5 billion in economic benefits, and power 1.15 million homes with clean energy.

Together, all three offshore wind projects will bring the state’s total planned wind capacity to 3,700 MW.

“The state has been incredibly proactive in recent years on developing the renewables industry,” says Lathrop Craig, PSEG’s vice president of offshore wind. “The [current] administration has actually accelerated its planned progress on getting to its goal, awarding more than twice the number of MW that were originally targeted in this second round of projects.”

The partnership between PSEG and Ørsted makes sense, as PSEG, which has a 25% equity interest in Ocean Wind, can leverage its position as the largest builder of transmission infrastructure in New Jersey to help distribute power generated from the turbines to existing transmission systems so that wind generated power can be used throughout the state.

“We are sort of the ‘last mile’ contributor for this kind of project,” Craig says.

In terms of the outlook for the offshore wind industry in the state, BPU President Joseph L. Fiordaliso says that New Jersey has a “once-in-a-generation opportunity to establish [itself] as the epicenter of a new industry that will provide tens of thousands of jobs and billions of dollars in economic benefits.”

Craig is optimistic.

“The challenge is that these are long-term projects that require significant review at the national level prior to getting permits, as well as [multiple] years of construction,” Craig says, meaning that it would likely take until the end of the current decade to see a significant number of turbines in the ocean producing energy.

“A lot can happen in that timeframe. Things look good now, and I hope that continues as we move forward over the course of the rest of this decade,” he adds.

Solar Power

New Jersey is currently home to 143,555 solar installations totaling 3,655 MW of energy, and according to the Solar Energy Industries Association (SEIA), ranks 7th in the US for total installed solar photovoltaic (PV) capacity.

Michael Eden, co-owner of Blackwood-based Vision Solar, says he feels confident with where the industry stands today, and cites a two-year extension of the Solar Investment Tax Credit (ITC) as one specific example. The ITC is a 26% tax credit for solar systems on residential and commercial properties, and has helped the US solar industry grow by more than 10,000% since it was implemented in 2006, according to SEIA.

Locally, the BPU voted in July to implement the Successor Solar Incentive Program (SuSI), which will pave the way for up to 3,750 MW of new solar generation by 2026, which would double New Jersey’s solar capacity. Once fully implemented, 10% of New Jersey’s total electricity needs would be generated by solar power.

SuSI will include the Administratively Determined Incentive (ADI), which is a fixed incentive payment for net metered solar projects of 5 MW or less; and the Competitive Solar Incentive (CSI), a competitive solicitation designed to incentivize the lowest financial contribution from ratepayers for grid supply projects and net metered commercial and industrial projects larger than 5 MW.

While utility costs continue to rise each year, Eden says that one of the attractions of solar is that it comes with a locked-in rate, which provides protection from unpredictable electricity bills and utility rate increases.

“At the same time, the cost to manufacture solar panels is going down, so it is making that number much more attractive for consumers,” Eden says. “The average consumer is going to save around 30-40% every month on their utility bill [with solar].”

Conclusion

With the UN’s Intergovernmental Panel on Climate Change’s recent landmark report being described as a “code red for humanity,” by UN Secretary General Antonio Guterres, the push for more clean energy has taken center stage. While challenges still exist, such as ensuring commitments to decade long initiatives and projects, balancing incentives, and alleviating systemic inefficiencies, tangible steps are being taken in New Jersey in an effort to inch closer towards its lofty renewable energy goals.

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