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Thinking Small Could Alter Power Grid by Integrating Small-Scale Power Systems

Distributed energy resources like solar arrays and CHP can help customers save while giving utilities a way to trim spending on local, long-distance infrastructure

small solar array

If New Jersey is to achieve its ambitious clean-energy goals, it needs to integrate small-scale power systems, like solar systems and energy storage, into the electricity grid, according to a new study by groups working to promote renewable energy.

The study embraced much of the Murphy administration’s clean-energy agenda, particularly electrifying the transportation and building sectors, but also recommended a moratorium on new natural-gas pipelines, an issue pushed by large segments of the environmental community so far ignored by the governor’s office.

The report largely focuses on what is termed distributed energy resources (DER) — solar arrays, small wind systems, fuel cells, and combined heat and power (CHP) — typically connected to local utility distribution wires instead of more centralized transmission wires.

Savings for customers, utilities

Those systems offer the opportunity for customers to trim energy bills, as well as reducing the need for large-scale transmission investments by utilities. They also cut expenditures on utility distribution systems by eliminating the need for new substations and other infrastructure, the report said.

“If New Jersey is smart about how it integrates distributed generation, it can save ratepayers money and provide resilience,’’ said Jeanne Fox, part of the leadership team of the Center for Renewables Integration, a contributor to the study, and former president of the New Jersey Board of Public Utilities. “Use of Distributed Energy Resources, like solar, wind, battery storage, and smart inverters can make a big difference if New Jersey gets hit by another Sandy.’’

But the 16-page report recommends a moratorium on new gas-pipeline projects, a hugely controversial issue in New Jersey yet to be addressed by the Murphy administration. It suggested before the state approve new gas pipeline projects, it needs to consider nonpipeline alternatives, as conEdison did in New York.

A hot solution

In that case, the utility replaced the need for new pipelines by turning instead to hot water or space heating with electric pumps providing clean heat from renewable energy.

“This is not only helpful promoting our climate goals, but in developing nonpipeline alternatives,’’ said Fox, who also argued it would help prevent utilities from investing major capital into expenditures that could end up as stranded costs as the state phases out reliance on fossil fuels.

Sooner or later, New Jersey customers will embrace so-called DER, according to the study. “The question facing New Jersey is whether its energy system will integrate these resources, or simply tolerate them,’’ the report said.

Scott Weiner, another former BPU president and now CEO of my-Resi, a developer of residential solar and storage systems, suggested distributed energy resources are coming — no matter what the state does.

“It will proliferate on people’s rooftops, in people’s homes, and by technologies,’’ he said. “The grid is changing. It’s going in both directions not just from providers to consumer, as ever-increasing number of consumers become providers,’’ Weiner said.

Still, some hurdles remain to be cleared, such as interconnection policies with the traditional power grid. “The interconnection process remains one of the key bottlenecks to New Jersey’s clean-energy future,’’ according to the report. Utilities have resisted these interconnections because they reduce their revenue.

The report recommends targeted incentives to bring the benefits of clean energy to communities already burdened with pollution, a way to reduce their exposure to harmful emissions affecting residents’ health.

In the long run, more customers will choose to adapt to more localized energy generation, the report said. “This trend is likely to accelerate as EVs (electric vehicles ) become more mainstream and as the cost of solar, battery storage, and smart energy management devices begin to fall.’’

In that vein, those efforts are likely to avoid big investments in transmission and distribution upgrades, according to the report.

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