Are New Jersey’s utility customers paying too much to meet the state’s renewable energy requirements, mostly by funding similar programs and creating green jobs in other states?
The question is being raised as some argue that the state’s ambitious targets to increase the use of renewable energy can’t be achieved, primarily because many of the key technologies, such as offshore wind, are unlikely to be deployed.
The result? Of the $105 million collected from the state’s ratepayers this year to pay for credits to support some types of renewable energy, about $90 million will flow to out-of-state renewable energy projects and green jobs, according to an analysis put together by an energy lobbyist and a colleague.
The reason the money is on the move to neighboring states is that renewable resources like wind are more plentiful and more affordable in other locales, the analysis said.
This trend will significantly worsen in the next few years unless something is done, according to the analysis, potentially ballooning to $180 million heading out of the state by 2021.
The issue is being raised at a time when some question whether New Jersey’s goal of using renewable energy to supply more than 20 percent of its electricity by 2020 can be met.
According to the current target, by 2020 New Jersey is supposed to obtain 1,100 megawatts of electricity from offshore wind farms, none of which have been approved by the state. And few expect that to happen anytime soon.
Fred DeSanti, the lobbyist, is pressing state policymakers to revamp the aggressive goals they have set to shift to cleaner ways of producing electricity, saying the state’s standards for achieving solar, wind, and other sources of renewable energy are far higher than the ability to reach them.
As a matter of perspective, DeSanti has a stake in the outcome of the discussions.
Desanti is a lobbyist who represents developers who are pressing the state for incentives to build new energy-efficient power plants that produce electricity and heat simultaneously. The units, dubbed combined heat and power (CHP) plants, are viewed by administration officials and others as a way of building more resiliency into the power grid, particularly for keeping the power on for hospitals and water/wastewater facilities if the grid goes down in an extreme storm.
To help advance that goal, DeSanti is urging policymakers to adopt a new renewable portfolio standard for energy efficiency and CHP projects. Such a goal would help meet the state’s Energy Master Plan by creating 1,500 megawatts of CHP capacity by 2020, he said.
Such a proposal would send a signal to developers that future funding would be available to spur development of CHP projects, which have faltered because uneven state funding commitments to help finance the facilities.
“Quite frankly, we have needs that are going unmet,’’ DeSanti said. “Simply stated, we grossly overestimated the potential for renewable energy projects in New Jersey.’’
Those estimates include not only wind power, but possible contributions from fuel cells (which produce energy from a chemical reaction), biomass (energy generated from plants and other organic materials), and tidal wave action, a technology yet to be proven commercially feasible.
“This option will help protect New Jersey’s critical assets in the event of another superstorm and will create jobs,’’ DeSanti argued in his presentation. It also could significantly reduced carbon emissions contributing to global climate change through improved energy efficiency projects.
The state Board of Public Utilities is considering ways to promote such projects, but neither its proposal, nor ones in the state Legislature have made much progress in moving forward.
Jeff Tittel, director of the New Jersey Sierra Club, argued the state does not need to expand its renewable energy requirements to include projects such as CHP, but instead should focus its efforts on promoting solar and adopting much-delayed regulations to encourage offshore wind projects.