Transition to Cleaner Energy Won’t Need Big Rise in Spending, NJ’s Consultant Suggests

Tom Johnson | November 4, 2019 | Energy & Environment
Findings will shape Murphy administration’s final Energy Master Plan and might ease some consumer fears over possible spike in energy bills
Credit: Stephen Yang/The Solutions Project
Installing a solar panel; solar energy is projected to provide 34% of New Jersey’s electricity generating capacity by 2050.

The state unveiled its most explicit road map yet for how New Jersey will achieve a 100% clean-energy future, a projection its consultant says can be achieved with only a modest rise in overall energy spending.

Those projections, offered in modeling by the Rocky Mountain Institute for the New Jersey Board of Public Utilities, aim to detail how the state can transition from an economy largely driven by fossil fuels to one that relies on cleaner, less polluting technologies, and sharply curbs emissions contributing to global climate change.

The findings will shape the final contours of an Energy Master Plan being developed by the Murphy administration to overhaul the state’s energy policies, as well as the state’s efforts to reduce greenhouse gas emissions by 80% below 2006 levels by 2050, according to the Global Warming Response Act. The plan is expected to be adopted by the end of the year.

The conclusions suggested by the modelling might ease concerns raised by consumer and business advocates who fear the transition will not only disrupt the economy but spike energy bills in an already-high cost state. But there will be plenty of debate over several aspects of the projections.

If the state moves to a least-cost pathway to clean energy, the consultant estimated overall energy spending in New Jersey would only increase to $34.7 billion in 2050 compared to $32.6 billion if energy policies continued with business as usual, or a 6% increase.

Are all the potential costs being counted?

Those projections do not include impact to ratepayers — the subject of another ongoing study by the Rutgers Energy Institute, according to Samantha Levine, a spokesperson for BPU. That has been a big bone of contention among critics of the master plan — that it fails to detail what these policies will do to electric and gas bills.

“There are concerns over what is still left out,’’ said Ray Cantor, a vice president of the New Jersey Business & Industry Association, who listened in on a webinar Friday that detailed the modeling results. He mentioned the potential impacts to ratepayers; costs of various programs that were left out; and various assumptions made by the consultants, including a very high reliance on New Jersey solar energy to provide the power needed to replace fossil fuels.

By 2050, solar energy is projected to provide 34% of the state’s electricity generating capacity — even more than offshore wind even though the consultant’s projections envision it nearly tripling from current projections of 3,500 megawatts.

That struck some clean-energy advocates as surprisingly high — given a year-long fight over how to rein in what ratepayers pay to subsidize solar energy in New Jersey, a cost that has been running at over a half-billion dollars a year. In addition, a new clean-energy law puts a cap on how much solar can cost utility ratepayers.

“I am wondering how they could project so much solar with us living with the solar cap,’’ said Jeff Tittel, director of the New Jersey Sierra Club.

Far less reliance on natural gas

But others welcomed the plan. “New Jersey residents are demanding a clean energy future, and this analysis shows it can be done at a very low cost to consumers, while keeping lights on, improving public health, and generating billions in net benefits,’’ said Tom Gilbert, campaign director for energy at the New Jersey Conservation Foundation.

Here’s what the state’s energy mix will look like in 2050, according to the BPU consultant’s modeling: Roughly 57% of our power will come from New Jersey solar systems and offshore wind farms off the coast (23%). About 20% of energy will come from out-of-state sources involving those technologies. Nuclear will still be around, providing 16% of power, even though the state’s three nuclear plants’ licenses will expire by then.

“We are doubtful that you can have a system with such high levels of intermittent sources (solar and wind) and still maintain reliability,’’ Cantor said.

Natural gas use will decline dramatically, replaced in a much smaller way, through use of “clean biogas,’’ plant products that can burn it in conventional turbines instead of fossil fuels. Those fuels won’t completely disappear, still being used in providing heat to some buildings, and use in manufacturing processes. It likely means a fossil fuel moratorium pushed by environmental groups may not happen anytime soon, if the consultants’ projections ring true.

The modeling also envisions electrification of both the transportation and building sectors. That would mean widespread adaption of electric vehicles and replacing natural gas with electric heat pumps for heating buildings — both huge undertakings.

“Electrification has to start now and occur much faster than what we have seen,’’ said Robert Lurie, a former executive vice president of the New York Power Authority, and a partner and co-founder in White Dog Strategies LLC, a consulting firm. “We have to start today with putting heat pumps in buildings.’’