BPU Wants to Fund Back-Up Energy-Storage Projects to Tune of $3 Million

Tom Johnson | October 27, 2014 | Energy & Environment
Technology seen as key to increasing resiliency, helping state meet aggressive renewable energy policies

Credit: Amanda Brown
The BPU's Dianne Solomon.
The state wants to award up to $3 million to energy-storage projects, a policy officials say could help government, commercial, and industrial facilities have a backup power source in the event the traditional power grid fails during an extreme storm.

In a solicitation approved last week by the New Jersey Board of Public Utilities, the agency is offering the financial incentives to developers with energy-storage systems linked to renewable-energy projects that provide onsite power to facilities. The money comes out of the state’s Clean Energy Fund, which is financed by a surcharge on utility customers’ bills.

Because many renewable-energy technologies, particularly solar and wind, are intermittent sources of providing power — the sun does not always shine and the wind does not always blow — the storage systems are viewed as crucial to helping the state achieve its aggressive renewable-energy goals.

The state wants New Jersey to produce 22.5 percent of its electricity from renewables by 2020, but clean-energy advocates are pushing a bill in the Legislature that would ramp up that target to 80 percent by 2050, a goal some view as unrealistic.

Successful energy-storage systems are still under development, but if the state is going to aggressively increase how much of its electricity comes from renewable sources, they are deemed as essential to maintaining the reliability of the electric power grid.

According to BPU officials, the agency’s proposal “will ultimately benefit New Jersey ratepayers’’ by providing backup power for essential services, offsetting peak loads by shifting electricity to hours of higher demand, and help stabilize the electric distribution system.

The proposal would prioritize facilities that are defined as “public and critical,’’ with the goal of demonstrating the potential for energy storage from renewable-energy systems to keep them operating during power outages.

“This is an exciting solicitation,’’ said BPU Commissioner Dianne Solomon, noting the issue of energy storage has become one of national interest.

Energy storage emerged as a huge issue during Hurricane Sandy in October 2012. Wastewater treatment plants flooded, spilling billions of galls of untreated sewage into the state’s waterways. Drinking-water systems also lost power, leading to dozens of boil-water advisories for customers.

In order to spread out the cost of the financial incentives over as many projects as possible, the solicitation says applicants can request a maximum of $500,000 per project, or 30 percent of the project’s total installed cost.

Applications for the financial incentives must be submitted by December 8, 2014, with a staff recommendation to the BPU commissioners expected sometime in January.

In addition to the energy-storage solicitation, the board also approved a $3 million proposal to encourage developers to install biopower projects onsite. Biopower uses organic materials from plants and animals to produce electricity. Without the incentives, such projects could not move forward, according to the agency’s solicitation.

The two solicitations occur just as the BPU has begun accepting applications from wastewater treatment plants and drinking-water systems to fund $64 million in projects to make those facilities more resilient, so they continue to operate in the event of big storms like Sandy.

The money would come out of a new Energy Resiliency Bank that has been funded by a $200 million grant from the federal government. The first allocation of funds will be distributed to the wastewater treatment plants and drinking-water systems that experienced long outages during Hurricane Sandy.