New Jersey s Clean Energy Program Municipal Technical Training Fundamentals June 11 & 25, 2008 Mark Valori Renewable Energy Technical Director Market Management Team
Agenda Presentation Overview Usage Deconstruction Electricity Fundamentals Renewable Portfolio Standard Energy Master Plan Renewable Resources Value Drivers
National Consumption Trends Energy Consumption by Fuel Type Percent of Total Site BTU 60 50 40 30 20 10 23 30 35 37 53 53 52 49 21 13 10 8 3 3 4 4 Increase in Electricity Use is driven by: Large increase in use for appliances and lighting Increased penetration of air conditioning units (from 57% in 1978 to 78% in 2001) Reductions in Natural Gas and Fuel Oil consumption is driven by: Increased efficiency in heating systems Reduction of units using Fuel Oil (from 22% to 8%) 0 Electricty Natural Gas Fuel Oil LPG 1978 1987 1997 2001
National Consumption Trends Energy Consumption by End Use 80 Percent of Total Site BTU 60 40 20 0 66 54 51 46 3 5 4 8 Space Heating A/C Water Heating Appliances & Lighting 15 18 19 17 1978 1987 1997 2001 17 23 27 29
80 Mid Atlantic Region Consumption Trends Energy Consumption by End Use Percent of Total Site BTU 60 40 20 63 61 57 18 18 18 19 16 23 Air Conditioning: Units with A/C 75% Central A/C 33% Room Unit 42% Annual Spend $117 3 2 3 Annual Usage 995kWh 0 Space Heating A/C Water Heating Appliances & Lighting 1993 1997 2001
Appliance Penetration Trends Penetration (%) 100 80 60 40 20 57 77 72 68 64 61 14 79 83 86 37 43 45 50 53 61 66 69 71 74 16 35 56 0 Air Conditioner Microwave Dishwasher Clothes Dryer Home Computer 1980 1987 1990 1997 2001 Penetration of various household appliances helps to explain the shift of electric use to lighting and additional appliances. Household appliance trends are as follows: 17% of homes have more than 1 refrigerator up from 14% in 1980 32% of homes have a separate freezer down from 38% in 1980 99% of homes now own at least one color TV, up from 82% in 1980 Home computer ownership is up to 79% in 2003 Slow growth of air conditioning usage despite its increase in penetration indicates fast acceptance of high-efficiency units
Representation of Conventional Centralized Electricity Generation Power Plant Transmission Distribution
Residential Electric Bill Typical Residential Electric Rate $ Per kwh $0.12 $0.10 $0.08 $0.06 $0.04 $0.02 $0.00 ($0.02) $0.109 2005 SBC (Societal Benefits Charge) ~3% Social Programs Nuclear Plant Decommissioning MGP remediation (RAC) Consumer Education Programs Universal Service Fund DSM and EE programs CORE Program Home Performance Program Distribution BGS SBC STC NTC-NUG MTC Tax TEFA Sales Tax Excess Depreciation
Load Economics Load (watts) Load (kw) Duration (hr) Usage (kwh) Electric rate ($/kwh) Billed Amount ($) 60.060 1.060 0.109.01 1000 1 1 1.00 0.109.11
Representation of Conventional Centralized Electricity Generation Power Plant Transmission Distribution
Representation of Distributed Electricity Generation Power Plant Transmission Distribution
Representation of Non-Conventional Electricity Generation Renewable Generation Clean Energy Wind Solar Fuel Cells Wave/Tidal Biomass Geothermal Hydro vs. Conventional Generation Wind Solar Fuel Cell Wave/Tidal Biomass Geothermal Hydro Nuclear Clean Coal (IGCC) Coal Trailings Tire Burners No Carbon Footprint Addresses an existing environmental issue The definitions vary from state to state program to program In absence of Federal legislation states have required that certain percentages of their load be derived from renewable or clean energy sources. These requirements are called Renewable Portfolio Standards.
U.S Renewable Portfolio Standard (RPS) Status Currently there are 24 states plus the District of Columbia that have RPS policies in place. Together these states account for more than half of the electricity sales in the United States. Four other states, Illinois, Missouri, Virginia, and Vermont, have nonbinding goals for adoption of renewable energy instead of an RPS. (Vermont has a voluntary goal which converts to man.)
NJ Class I Renewable Energy Electric energy produced from: Solar technologies, photovoltaic technologies, wind energy, fuel cells powered by renewable fuels, geothermal technologies, wave or tidal action, and/or methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner. Types of class I renewable energy that qualify for use in meeting the requirements of this subchapter are set forth at N.J.A.C. 14:8-2.5.
NJ Class II Renewable Energy Electric energy produced from: Hydroelectric facility that has a maximum design capacity of 30 megawatts or less from all generating units combined. Resource recovery facility located in New Jersey, covered by all required NJDEP approvals, and operating in compliance with all applicable New Jersey environmental laws. A resource recovery facility located outside of New Jersey qualifies as Class II renewable energy if both of the following criteria are met: 1. The facility is located in a state with retail competition; and 2. NJDEP makes an environmental compliance determination, stating that the facility meets or exceeds all NJDEP requirements that would apply to the facility if it were located in New Jersey, or meets equivalent environmental requirements.
Renewable Energy Certificates Renewable Energy Certificates (RECs) are a market mechanism to track and trade attributes of renewable energy A REC represents the environmental benefits or attributes of one megawatt-hour of generation from a renewable generating facility. Electric power generators are required to obtain RECs to satisfy their RPS goals. In absence of sufficient RECs generators are required to pay an Alternate Compliance Payment (ACP)
Solar Renewable Energy Certificates Solar Renewable Energy Certificates (SRECs) are a market mechanism to track and trade attributes of photovoltaic solar renewable energy An SREC represents the environmental benefits or attributes of one megawatt-hour of generation from a generating facility. Electric power generators are required to obtain SRECs to satisfy their RPS goals. In absence of sufficient SRECs generators are required to pay an Solar Alternate Compliance Payment (SACP)
Net-Metering and Interconnection Standards Interconnection State regulations that permit small generators (< 2MWs) to be installed behind the meter. These generators cannot be sized to over produce based on current site consumption. Mandates that utilities connect them to the grid. Net-Metering State regulations that allow interconnected generators to offset their electric consumption with an on-site resource. Allows production of electricity beyond site consumption to be sold to the grid and be compensated at the wholesale price of energy.
Energy Master Plan Goals 1. To provide New Jersey with secure, safe and reasonably priced energy supplies and services. 2. To encourage and maintain economic growth prospects for the State. 3. To promote the achievement of Federal and State environmental requirements and objective in a low cost manner. (Environmental protection and impact)
Energy Master Plan Goals 100,000 80,000 Expected Growth, Business as Usual and Existing Levels of Energy Efficiency 80,000 62,000 Conventional Generation MWHs of Energy Demand 2006 2020
Energy Master Plan Goals 80,000 100,000 Expected Growth, Business as Usual and Existing Levels of Energy Efficiency Goal with 20% Efficiency Energy Efficiency 80,000 62,000 Conventional Generation MWHs of Energy Demand 2006 2020
Energy Master Plan Goals 80,000 Conventional Generation Energy Efficiency Renewables 100,000 Expected Growth, Business as Usual and Existing Levels of Energy Efficiency Goal with 20% Efficiency 80,000 Goal with 20% Class I Renewables, 2.5% Class II Renewables 62,000 MWHs of Energy Demand 2006 2020
Energy Efficiency C&I Programs SmartStart Buildings Design Assistance Grants New Incentives for 2008: Municipal/Local Government Audit Program Direct Install Pilot Program Pay For Performance Pilot Program School Energy Education Pilot Program
Renewable Energy Renewable Resources Wind: Shore, highlands Sustained winds of 12 mph Solar: Output ~1200 kwh AC Biomass Includes LFG, WWT, wood residue, food waste and aggregation of resources Government Activism 20/20 RPS plan Energy Master Plan BPU commitment RGGI New Jersey Profile Today 46.6MW PV solar 2950 installs 3 MW Biomass 2.6 MW Wind 1.1 MW Fuel Cells Tomorrow 1,500 MW Solar 1,000 MW Offshore Wind 200 MW Onshore Wind 900 MW Biomass
Renewable Energy U.S. Solar Resource Map Capacity in Percent >20 20-30 30-40 40-50 50-60 60-70 >70 High retail energy costs and new net metering rules are favorable for PV solar. (PV energy output in New Jersey is 27% less than Arizona but New Jersey rates are 50% higher per kwh.
Renewable Energy New Jersey Wind Resources
Renewable Energy New Jersey Biomass Resources Biomass is Concentrated in the Counties of Central and Northeastern New Jersey. County Totals Biomass/Sq Mile Almost 75% of New Jersey s biomass resources are produced directly by the state s population, much of it in the form of municipal solid waste. Total Tons Dry Tons/Sq Mile Courtesy of EcoComplex
Renewable Energy Renewable Energy Value Drivers Capital Overhead & Cost of Maintenance System Accelerated Depreciation Tax Impact Federal Investment Tax Credit Energy Value Other??? REC/SREC Value CORE Subsidy
Renewable Energy SREC Value Driver Historical SREC Pricing $350 $300 $250 $200 $150 $100 $50 $0 Annual High Annual Low Annual Compliance Payment (SACP) 2004 2005 2006 2007 2008 Weighted Average
Renewable Energy SREC Value Driver Historical SREC Trading Volume 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2004 2005 2006 2007 2008
Renewable Energy SREC Value Driver New Jersey Solar Market Transition Revised Straw Proposal SACP/SREC Schedule $ MWh $720 $700 $680 $660 $640 $620 $600 $580 $560 $540 $520 2009 2010 2011 2012 2013 2014 2015 2016 SACP Energy Year SACP
If you have any questions about this presentation or New Jersey s Clean Energy Programs, please feel free to contact: Mark Valori at mark.valori@csgrp.com Phone 732-218-3411