clean air council feb 14, 2007 general overview michael winka, director lance miller chief of staff...

Clean Air Council Feb 14, 2007

General Overview

Michael Winka, Director

Lance Miller Chief of StaffNew Jersey Board of Public Utilities

Office of Clean Energy

New Jersey’s Clean Energy Program


New Jersey’s Clean Energy Program is a statewide program administered by the New Jersey Board of Public Utilities that promotes energy efficiency and renewable energy for all New Jersey ratepayers including residences, businesses, schools and municipalities.


• EE (including CHP) and RE will provide energy growth by 2012

• 20% annual increase in electric and natural gas energy efficiency saving

• 785,000 MWh of electricity and 0.6 billion cubic feet of gas will be saved through EE programs by 2012

• 300 MW of Class I RE facilities by 2008

• 90 MW PV by 2008

New Jersey’s Integrated ApproachGoals and Objectives


• 20% reduction in energy use by 2020

• 20% Class I Renewables by 2020

• 2% or 1500 MW solar by 2020

• 20% reduction in 1990 GHG by 2020

• 50% reduction in 2006 GHG levels by 2050

New Jersey’s NewGoals and Objectives


• Energy Master Plan (code, standards EE/RE CHP

• New Jersey’s Clean Energy Program

• Regional Greenhouse Gas Initiative RGGI

• State Energy Director

• Energy Certificate trading

• Energy Star – Zero Energy Buildings USGBC – LEED other

New Jersey’s NewTools


New Jersey’s Clean Energy Program 01 – 08 Funding LevelNon-bypassable fee - all electric and natural gas customers

Year Total ($M) EE ($M) % RE ($M) %

2001 $115 $86.25 75% $28.75 25

2002 $119 $89.25 75% $29.75 25

2003 $124 $93 75% $31 25

2004 $124 $93 75% $31 25

01 - 04 $482 $361.5 75% $120.5 25

2005 $140 $103 74% $37 26%

2006 $165 $113 68% $52 32%

2007 $205 $123 60% $82 40%

2008 $235 $133 56% $102 44%

05 – 08 $745 $472 63% $273 37%

Total $1,227 $833.5 68% $393.5 32%

Avg $153.4 $104.2 $49.2


New Jersey’s Clean Energy Program 05 – 08 Allocation Bill impact and rate impact

SBC Allocation • 44% of the SBC allocated for electric Energy Efficiency • 17% of the SBC allocated for natural gas Energy Efficiency• 37% of the SBC allocated for Renewable Energy

Bill Impacts• $18 per year per the average residential electric customer• $14 per year yr per the average residential natural gas customer

• $14 per year per household for electric Energy Efficiency • $5 per year per household for natural gas Energy Efficiency• $12 per year per household for Renewable Energy

• 1-2% rate impact over 4 years (2005 – 2008) or 0.25 - 0.5% PER YEAR


NJCE Program2003 – 2008 Annual Reporting and Goals

Year EE Electric EE NG RESolar RE Class I

MWh Dtherm MW MW

2003 A 285,586 408,583 1.7 76

2004 A 328,912 432,758 2.1 3.7

2005 A 382,845 617,261 5.5 15

2005 G 341,770 489,305 4 19

2006 G 409,454 586,206 14 38

2007 G 486,958 697,167 27 66

2008 G 575,568 824,028 39 89


New Jersey’s Integrated Approach for Renewable Energy

• Net Metering/

Standard Interconnections

• Capital Cost Incentives/Rebates

• Portfolio Standard –

Longer term financing


Renewable Energy Incentives/Rebates

Lower the initial capital cost Improve the payback period to 5-10 years or better – including REC value.

60% of capital cost for up to 1 MW 20% grants - 80% loan for RE Power Plants


• Up to 2 MW – 125% of Annual Use

• Small Commercial Business

Up to 10 MW peak

• < 10 kW Inverter-based - No fee

• Reduce barriers

• Set timeframes for review

New Jersey’s Net Metering and Interconnections Standards


Onsite Renewable Energy

Program Rebates History

Solar Electric Systems 2005 PV Rebate per watt

# of kW

2003 thru 06-24-05

08-05-05 in service by 1/1/06

08-05-06 in service after

12/31/05

03-16-0609-01-06

1 to 10 $5.50 $5.30 $5.10 $4.35 $3.80

10.01 to 40 $4.00 $4.35 $3.90 $3.20 $2.75

40.01 to 100 $4.00 $3.75 $3.45 $3.00 $2.50

100.01 to 700 $3.75 $3.60 $3.20 $2.80 $2.25

500 to 700 0.30 $2.00


Status Number Capacity Rebate

Installed with OCE rebate

2,042 36 MW $147 M

Approved for Rebate

511 23 MW $88 M

Applications in Queue

1,412 82 MW $152 M

TOTAL 3,965 141 MW $387 M

NJ’sCEP Solar Rebates Installed, in-Construction and Awaiting Approved

As of September 2006


New Jersey Solar Installations & Capacity

4Q 2006 NJ Solar Market Stats as reported online at NJCleanEnergy.com


Renewable Energy Portfolio Standard RPS

• The RPS requires all NJ electric supplier to provide a set percentage of their electricity as Class I renewable (wind, solar or sustainable biomass)

• EY 2005 0.75% including - 4 MW of PV • EY 2009 4.0% including by 90 MW of PV • EY 2021 20% including 2% solar PV or 1500 MW •

Bill cost to the average electric residential customer• EY 2005 -- $1.40 per year per household• EY 2009 -- $4.50 per year per household• EY 2021 -- $23.00 per year per household


Renewable Energy Portfolio Standard

Compliance with NJ’s RPS is through Renewable Energy Certificates (RECs) issued and tracked through either PJM’s Generator Attributes Tracking System (GATS) or NJCEP’s Behind the Meter system

Each MWh of energy produced by a renewable energy generator creates 1 REC. This REC has a unique serial number. When it is traded and used for compliance, it is matched with a MWh or energy supply and retired. In NJ system RECs have a 1 year life and most be used in the year they are generated plus a 3 month true up period

Current prices for RECs:LFG REC $5, Wind REC $15, Solar REC $200

NJ’s RE goals will be achieved through the RPS and financed by RECs


Solar Renewable Energy Certificates (RECs)

Renewable Generator:Production of

Renewable Energy Environmental Benefits(S02, NOX,CO2 )

Commodity Electricity

Certificates represent the environmental benefits and other attributes associated with electricity generated from a renewable energy generator . May be traded independently of underlying electricity.

New Jersey REC or Solar REC

Electric Supplier:Retires the REC


New Jersey’s RPS Value of RECs

YearClass 1 – Class 2 and Solar RECs

Solar RECS

2005 $ 14,009,400 $ 1,448,000

2009 $ 48,746,600 $ 15,080,000

2021 $ 222,275,800 $ 126,000,000

GHG Credits -> $25 -> $250

REC $15 -> $5 ($2.5) $200 -> $70


New Jersey SRECs


New Jersey RECs Reporting in PJM GATS

• PJM – Environmental Information Systems (EIS launched its Generator Attributes Tracking System (GATS) in Oct 2005 for the Mid-Atlantic States

• NJ, MD,PA, DE and DC all use GATS for their RPS Compliance Reporting

• Feb 2006 GATS reported 14,282,070 REC generated during the first 2005 trading period

• This represents 2.02% of PJM total system mix • 82 account holders• 734 generators• More info available at www.pjm-eis.com


• New Jersey’s 20 % by 2020 Renewable Energy Portfolio Standards (RPS) will require at minimum approximately 4,400 MW of renewable energy capacity and 1500 MW of Solar capacity.

• NJ cannot simply “buy” our way to the RPS goals by providing rebates or grants to construct this capacity.

• We must consider other models ….

New Jersey’s Transition toan Open Market RECs based System


Insert Residential Home

New Jersey Residential 10 kw Solar Electric System

Installed Cost: $77,500

NJCEP Rebate: $38,000

Electric cost savings / Net Metering: $1,500/ yr

Out of Pocket Expense: $37,500

Total savings : $1,500

Federal Tax Credit: $2,000

Payback Period: 25 yrs

assuming a 12,000 kWh annual energy usage





NJCEP Rebate: $38,000


SRECs Income: $2,400 / yr

2005 $0.14/hh/yr

2009 $1.40/hh/yr

2020 $23/hh/yr

Out of Pocket Expense :$37,500 Total savings :

$3,900


Payback Period: 9.6 yrs


2008 $5.00/hh/yr





NJCEP Rebate: $0.00


Out of Pocket Expense : $75,500

Total savings : $1,500


Payback Period: 50.3 yrs




New Jersey Residential 10 kW

Solar Electric System


NJCEP Rebate: $0.00


SRECs Income: $6,050 / yr

$502/ SREC

Out of Pocket Expense : $75,500 Total savings :

$7,550


Payback Period: 10 yrs



2001 -2005 Energy Efficiency Programs - Residential

Program Participants MWh Dtherms

Home Energy Analysis

Warm Advantage 129,021 12,328,739

Cool Advantage 129,021 1,095,661

NJ Energy Star Homes 20,800 376,554 12,883,376

NJ Energy Star Products 4,889,210 1,715,225

Comfort Partners 31,555 550,945 6,729,837


Energy Efficiency Programs - Residential

Home Energy Analysis is a free online audit to help

residential customers understand and reduce their home

energy use links the audit to our residential rebates

Home Performance with Energy Star – In home

audit - Contractors certified by the Building Performance

Institute work with homeowners to identify sources of energy

loses and recommend energy saving improvements linked to

utility financing and residential rebates – performed additional

incentives for affordable housing up to 300% of the federal

poverty level


2005 Energy Efficiency Programs - Residential

Warm Advantage and Cool Advantage Programs Provides rebates and promotes energy efficient heating and cooling

systems in homes 27,510 participants saved 15,000,000 kWh, 13 MW

and 1,400,000 therms.

Energy Star Homes Provides incentives for energy efficient

new construction that target NJ area designated for growth (Smart

Growth) 8,000 participants 20% market share for new homes

construction saved 6,100,000 kWh, 19 MW, and 2,395680 therms.

An Energy Star home certification is acceptable as the local energy

code costruction review


2005 Energy Efficiency Programs - Residential

Energy Star Products Public education and incentives

for home energy efficient appliances and lighting over 1.2

million rebates provided for room air conditions and compact

fluorescents saving 63,500,000 kWh and 5 MW

Comfort Partners Provides 100% installation of energy

saving measures to low income customers at no cost to

improve their energy affordability linked with our other energy

assistance programs. Over 6,000 customers saving each

homeowner on average 880 kWhs and 76 therms for an annual

savings over $200.


2001 – 2005 & 2005 Energy Efficiency Programs – C&I

Smart Start Buildings Program Provides technical

assistance and incentives for new and retrofit efficiency

upgrades for commercial office buildings, industrial facilities,

schools, hospitals and government building owners. Provided

rebates to 2,400 businesses and government building owners

that saved 288,439,000 kWh, 36.5 MW, and 1,900,000 therms

saving these building owners over $60,000,000 annually.

Over the last 5 years 21,394 participants have saved 10,858,892,000 kWh and 68,853,920 therms


Energy Efficiency Programs – C&I

Combined Heat and Power Provides incentives up

to 30% to purchase and install various types of combined heat

and power systems up to 1 MW that have at minimum 68%

efficiency and meet all NJDEP State of the Art air quality

control limits – provided 10 rebates with commitments of $7.4

million.



Larger Projects 50,000 sq ft - starting in planning stage are Larger Projects 50,000 sq ft - starting in planning stage are eligible for for up to $12,000 in incentives :eligible for for up to $12,000 in incentives :Three step process to plan in overall energy efficiency into Three step process to plan in overall energy efficiency into and project in a coordinated approach:and project in a coordinated approach:

Pre-Design Planning Session up to $2,000Pre-Design Planning Session up to $2,000Design Simulation and Screening up to $5,000Design Simulation and Screening up to $5,000Detailed Analysis of Energy-Efficient Measures up to $5,000Detailed Analysis of Energy-Efficient Measures up to $5,000And…And…Equipment IncentivesEquipment Incentives

Additional Multiple Measures Bonus Additional Multiple Measures Bonus (Two or More Approved Measures)(Two or More Approved Measures)



Smaller Projects, or Those Begun After the Design Smaller Projects, or Those Begun After the Design Stage, May Take Advantage of:Stage, May Take Advantage of:

Project Review and ScreeningProject Review and ScreeningRecommendations for Energy-Efficiency MeasuresRecommendations for Energy-Efficiency MeasuresEquipment IncentivesEquipment IncentivesAdditional Multiple Measures Bonus Additional Multiple Measures Bonus (Two or More Approved Measures)(Two or More Approved Measures)



•Categories:

– Electric Chillers– Natural Gas Cooling– Desiccant Units– Electric Unitary HVAC

Systems– Natural Gas Heating

Systems

– Natural Gas Water Heating

– Premium-Efficiency Motors

– Prescriptive Lighting

– Lighting Controls

– LED Traffic Signals

– Variable Frequency Drives

– Ground Source Heat Pumps


Custom Measures

Customers May Request Technical Assistance and Receive an Incentive for Qualified Energy-Efficient Equipment Not on the Prescriptive Technologies List.

• Customer project in New Jersey

• Custom Measure application

• Screening process

• Incentive Up to 80% of measure or 1.5 year payback

New Jersey SmartStart Buildings® — The Program


Custom Measures• Local Government Energy Audits – up to 90% of

cost but will require all cost effective (LT 2 yr PB) to be implemented.

• Demand Response – Load Management Incentives

• Pay for Performance pilot

• Zero Energy Buildings (Energy Star Benchmarking)

• Linking EE and RE in congested areas

New Jersey Clean Energy Programs – New Developments


FreeFuel

Power & Hot Water from

Microturbine

PPT06287032207

Total EnergyUtilization

70%+

MicroTurbine~26%

Integrated Heat

Exchanger~45%

+ =

Natural Gas

Waste Heat


Energy Efficiency Portfolio Standard (EEPS) and EE Certificates

Energy Efficiency:Avoided Energy Use

Saved Energy Environmental Benefits(S02, NOX,CO2 )

Energy Savings

Certificates represent the environmental benefits and other attributes associated with electricity generated from a energy efficiency system. May be traded independently of underlying electricity.

New Jersey EEC

Electric Supplier:Retires the EEC


New Jersey’s EEPS Value of EECs

YearClass 1 Res EE

Class II C&I EE

Class III Clean DG

Class IVLoad Mgmt

2006 $ 5,124,000 $ 5,124,000 $ 5,124,000 $ 5,124,000

2012 $ 38,024,000 $ 38,024,000 $ 38,024,000 $ 38,024,000

2021 $ 84,900,000 $ 84,900,000 $ 84,900,000 $ 84,900,000

EEEC 2006 -> 2021 $70 -> $20


New Jersey’s Clean Energy Program2001-2004 Results

• New Jersey’s Clean Energy Program provides incentives for investments in energy efficiency and renewable energy

– $492 million in energy efficiency investments

• These investments help to:

– reduce customers energy bills– reduce pollution levels– reduce reliance on imported fuels– stimulate the local economy and keep energy dollars in the State



• The programs reduced electrical usage by 1,216,403 MWh over 5 years

– 243,280 MWH of energy savings per year

• These savings are equivalent to the electric usage of approximately 135,000 average homes



• These savings continue over the life of the measures which averages 15 years

• Savings over the life of the measures:

• 14,888,209 MWH of energy savings



• These programs also reduced natural gas usage by 2,048,981 Dtherms per year

• These savings are equivalent to the annual usage of over 20,000 average homes heated with natural gas

• Savings over the life of the measures:– 38,943,822 Dtherms



• The programs have also reduced electric demand by 450 MW

• This has eliminated the need to site, build and operate a mid-sized power plant

• Reducing demand also improves the reliability of the electric transmission and distribution system



• Energy efficiency and renewable energy generation also reduce emissions resulting in cleaner air and other environmental and health benefits

• Annual Emission Reductions:

– CO2: 317,467 metric tons– NOX: 550 metric tons– SO2: 1,217 metric tons– HG (mercury): 15 lbs



• Cumulative emission reductions over the life of the measures over the five years of the program:

– CO2: 13,190,265 metric tons– NOX: 21,798 metric tons– SO2: 46,283 metric tons– HG: 558 pounds


You can either incorporate more energy efficiency (including increased building energy codes and appliance standards) including combined heat and power and clean distributive and renewable energy into the over energy mix or pay for larger and larger transmission lines into NJ that will move your payments to out of state facilities and out of state jobs with the associated transport of out of state emissions contributing to the reasons NJ does not meet its clean air states putting more pressure on existing NJ business to reduce emissions

BOTTOM LINE


• New Jersey’s Clean Energy Program: • www.njcleanenergy.com

• Rutgers’ Center for Energy, Economics and Environmental Policy (CEEEP)

• http://policy.rutgers.edu/ceeep

• Clean Energy Council – Committees• Portfolio Management Work Group• State Energy Master Plan and Energy data management

New Jersey’s Integrated Approach


Thank you Thank you Questions ??Questions ??

YOUR POWER TO YOUR POWER TO SAVESAVE

Energy, Money and the Energy, Money and the EnvironmentEnvironment

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clean air council feb 14, 2007 general overview michael winka, director lance miller chief of staff...

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