new jersey’s clean energy program · • the nj solar photovoltaic market is one of the most...

New Jersey’s Clean Energy ProgramThe New Jersey Farm Bureau

Technical Training

March 13, 2009

Larry BarthMarket Manager Team

Mark ValoriMarket Manager Team

• Fundamentals

• Regulatory Environment

• Solar PV Development

• Wind Development

• Biomass Development

Presentation Overview

Agenda

1.00

.060

Usage(kwh)

0.109

0.109

Electric rate($/kwh)

.111

.011

Billed Amount($)

Duration(hr)

Load(watts) Load

(kw)

60

.060

11000

Load Economics

Representation of Conventional Centralized Electricity Generation

Power Plant

Transmission

Distribution

Representation of Distributed Electricity Generation

Power Plant

Transmission

Distribution

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. (Environmentalprotection and impact)

2006 2020

Conventional Generation

MW

Hs

of E

nerg

y D

eman

d

80,000

100,000

Expected Growth, Business as Usual and Existing Levels of Energy Efficiency

80,000

62,000



2006 2020


Energy Efficiency

MW

Hs

of E

nerg

y D

eman

d

80,000

100,000


Goal with 20% Efficiency 80,000

62,000


Conventional GenerationConventional Generation

Energy Efficiency

2006 2020


Renewables

Energy Efficiency

MW

Hs

of E

nerg

y D

eman

d

80,000

100,000


Goal with 20% Efficiency 80,000

62,000

Goal with 20% Class I Renewables, 2.5% Class II Renewables


11.1 35.7 75.4149.8

210.0294.2

385.8493.9

626.4

783.3

964.4

1,179.3

1,4271,500 1,500 1,500

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021years

MW

dc

New Jersey’s Current RPS Requirement for Solar (MWs)

NJ Class I Renewable Energy

• Solar technologies, photovoltaic technologies, wind energy, fuelcells 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.

Electric energy produced from:

(S)Renewable Energy Certificates

(Solar)Renewable Energy Certificates ((S)RECs) are a market mechanism to track and trade attributes of renewable energy

• A (S)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 (S)RECs to satisfy their RPS goals.

• In absence of sufficient (S)RECs generators are required to pay a (Solar) Alternate Compliance Payment ((S)ACP)

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.

New Jersey ProfileToday• 55.5MW PV solar

• 2950 installs • 4.2 MW Biomass• 2.7 MW Wind• 1.1 MW Fuel Cells

Tomorrow• 1,500 MW Solar• 3,000 MW Offshore

Wind• 200 MW Onshore Wind• 900 MW Biomass

Government ActivismEnergy Master Plan NJ RPSBPU commitment

Renewable Resources• Wind:

• Shore, highlands• Sustained winds of 11 mph

• Solar: • Output ~1200 kWh AC

• Biomass• Includes LFG, WWT, wood

residue, food waste and aggregation of resources

Renewable Energy Value Drivers

REIP Subsidy

Federal Investment Tax Credit

Accelerated Depreciation Tax Impact

Energy Value

(S)REC Value

Capital Cost of System

Overhead & Maintenance

Other???

Solar Project Development

• The NJ solar photovoltaic market is one of the most active in the world.

• Solar paybacks with incentives approx 7- 8 years; 12% IRR.

• Solar market transition away from rebates is underway.

• Despite progress the market is still in early phase.

• Over 170 solar installers in-state.• Market may transition with

economic stimulus package.

The New Jersey Solar Market

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.

U.S. Solar Resource Map

>20 20-30 30-40 40-50 50-60 60-70 >70

Capacity in Percent

Solar 101

Grid – Connected PV System

• Most important - design considerations:• site orientation• shading and obstructions• roof integrity or ground mounting space• thin film or crystalline panels (cost and aesthetics)• system sizing

• Panel availability improves in 09• Permits are easy• Small system installation timeframe can be 3-5 days• Practically maintenance free

Technical Considerations

Solar Energy Economic Framework

SREC

Fed ITC

Accelerated Depreciation

Rebate

Energy

Capital Cost of System

Overhead & Maintenance

Other???

17%

19%

23%

41%

-

19%

23%41%

17%ITCRebate

SREC Energy

$0

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011 2012 2013 2014 2015 2016

Energy Year

$/M

Wh

SACP Average SREC Market Value (Hypothetical)

Hypothetical Range of SREC Trading Values and Annual Average

Actuals will be determined by Market

Illustrative SACP and SREC Market Value

30-percent tax credit for both residential and commercial solar installations

Eliminates the $2,000 monetary cap for residential solar electric installations

Eliminates the prohibition on utilities from benefiting from the credit;

Allows Alternative Minimum Tax (AMT) filers to take the credit

Calculated net of state rebate

Investment Tax Credit

2009 Renewable Energy Incentive Program (REIP)Budget set at $21 millionRebate Levels:

Residential: $1.75/w; capped at 10kWNon-residential: $1.00/w; capped at 50kWAutomatic adjustments depending on uptake $.20/w less for those projects not including EE

SREC Securitization underwayNo Queues

Other Stimulus TBD

Rebate Levels

Small Solar Project Economics – Key Assumptions

System Size: 10 kWEnergy Rate: $.15 kWhEnergy Growth Rate: 5% yrInstalled Cost: $8.00 wattInverter Replacement: $1.00 wattSREC Value: $450 REC/yrITC: 30% Rebate: $1.75 watt

-$60,000

-$40,000

-$20,000

$0

$20,000

$40,000

$60,000

$80,000

$100,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Year

$

Energy Savings- Yr1: 25%- Yr15: 50%

12% IRR

Small Solar Payback

Wind Project Development

New Jersey Wind Market

• The required wind resource (>11mph) is along the shore and highlands.

• Best example of installed project is at ACUA, similar interest building among at other coastal municipalities

• Small wind projects have run into home rule issues; first model ordinance adopted by Ocean Gate.

• 2009 REIP plans dedicate $7.5M to small wind projects.• REIP supports Behind the Meter (BTM) projects• Rule changes required to support Group Net Metering and

Community Wind• Offshore wind evaluation is underway (summary on

NJCEP and NJDEP websites)

Wind Installed Projects

New Jersey Wind Resources

Output as a Function of Wind Speed

2,709kWh

6,136kWh

60’ 80’ 100’

9,338kWh

(a) 10kw system; source Mick Sagrillo; “Incremental Tower Costs vs Incremental Energy”

Output as a Function of Tower Height

• EPBB Incentive levels

• This is different than the previous wind incentive level which was calculated on the capacity of the system.

• Factors included in calculating annual input– Location specific wind speed– Hub Height– Obstructions within 500 feet

Wind Incentives - EPBB

$0.50 / Annual kWh16,000-750,000 kWh$3.20 / Annual kWh1-16,000 kWhIncentive LevelAnnual Estimated Production

Renewable Energy Incentive Program - EPBB

• Obtaining locals average annual wind speed• Wind maps for no charge are available at:

• http://firstlook.3tiergroup.com/• http://www.awstruewind.com/maps/united-

states.cfm/region/46688• http://eosweb.larc.nasa.gov

• Additionally a wind resource site assessment may be performed even though the average wind speed can be determined from the wind maps

• Site assessments are performed by;1. Certified site assessor evaluates topography and site characteristics

to give a more accurate evaluation2. Engineering firm performs detailed site assessments including wind

speed analysis based on anemometer readings

(Latitude: 40.50°; Longitude: 74.56°)

NASA: 12.9 mph (http://eosweb.larc.nasa.gov/cgi-bin/sse/grid.cgi

3-Tier: 11.2 mph (http://firstlook.3tiergroup.com)

AWS: 10.8 mph (http://www.windexplorer.com)

Wind Speed Assessment – Fish Hatchery

• Wind turbine equipment currently accepted by the program:

• If a wind turbine is not presently accepted by the program the following information must be provided

– Power curve based on one year of actual energy production data– Engineering certification form the manufacturer based on the power curve from an independent

third party• To apply to the program applicant must complete a pre-application for guidance

purposes

Renewable Energy Incentive Program - EPBB

– Northern Power Systems– Enertech– Proven– Fuhrlander

– GAIA Wind

– Eoltec– EWP– Energie– Bergey– Entegrity Wind Systems– ARE

Turbine Availability vs. Turbine Size

Ava

ilabi

lity

1kW 10kW 50kW 100kW 500kW 700kW 1.5MW 2.0MW 3.5MW

Larger turbines, MW size turbines, have a two year wait

Small Wind Turbine Height Comparison

Building PermitZoningNJDEP EvaluationsEngineering and

Pre Construction Permit

• Determine Wind Resource and direction

• Site specific evaluation (project owner)

Wind Generating Facility: Pre Construction and Permitting Process

Wind ResourceEvaluation

• Engineering- design and seals required

• Equipment Selection— Turbine— Tower— Inverter

• Pre-Construction Permit (owner)— Site Evaluation— Facility— Equipment

• Turbines— Some turbines

have up to a two year lead time

• Facility Pre-Construction Permit process (NJDEP CAFRA review if applicable)

• NJDEP is working to streamline the permitting process

• Engineering drawings

• Site Map• Ownership• NJDEP

certifications• Local Land Use

Permit— Seals & Stamps

• Restrictions and variances

• Building Permit• Electrical

• Local • land-use• building• electrical

• State (DEP):• CAFRA/Waterfront• Pinelands• Highlands• Well Drilling

• Federal• FAA• Bird and Wildlife• DOD

Model Wind OrdinancesAdopted by 8 NJ Communities

NJDEP Fast Track Proposal

Small Wind Permitting

• Defines common terms used in wind projects

• Provides general guidelines for setbacks, access, tower signage

• Defines permit procedure, application and turnaround times

• Provides for penalties and enforcement

• Intended to be customized

Adopters• Township of Oldmans• Brick • Galloway Township • Hillsboro Twp Ocean Gate • City of Brigantine • Deerfield • Millville • Pittsgrove Twp

Model Wind Ordinance

Dr. Lisa GregaAssociate Professor, Dept. Mechanical EngineeringThe College of New Jersey(609)[email protected]

Dr. Patrick Hossay, Ph. DAssociate Professor of Political ScienceStockton University609- [email protected]

Gina M. SurianoDirector of Grant ResourcesOcean County College732-255-0400, x 2949 [email protected]

Dr. Krishan Kumar BhatiaAssistant Professor Mechanical EngineeringRowan [email protected]

Jill MesonasCenter Administrator/ Chemical EngineerCenter for Advanced Energy SystemsRutgers, The State University of New Jersey(732) [email protected]

• Public University affiliation

• Free

• First-come first serve with priority to:

• larger projects

• best wind resource areas

• leverage existing towers

• One year loan, share data with NJOCE

• Application procedures vary

NJOCE Anemometer Loan Program

Small Scale Wind Myth Busters

• Wind turbines kill birds, bats and butterflies• Wind turbines are noisy• The towers are prone to falling over• Turbines interfere with TV and Radio reception• Wind turbines hurt property values• Turbines may throw blades or ice from the blades• Wind power is expensive and inefficient• Wind turbines only operate a small percentage of the time

- $9,000 per kW- 25% capacity factor- $.15 per kWh energy- 5% rate growth- $.025 per REC- 30% ITC- 20 year useful life

Results

9 year payback

10% IRR

Wind Economics

Sensitivity

1% pt increase in:- Energy price growth: +1.3%- Capacity factor: + 1.7%- REC price .2%

Assumptions

Biopower Project Development

- Concludes that 5.5 MDT of biomass are available in NJ, could support 9% of power or 5% transportation fuel needs

- Biomass includes:- Sugars: Ag crops and food processing residues- Ligno-cellulosic: Woody waste from yards, forests, lumber,ag residues

- Bio-Oils: Ag Crops and Waste Grease- MSW: Food residues, paper, yard waste- Other: Animal waste, Landfill gas, WWT Biogas

- Study can be found at: http://njaes.rutgers.edu/bioenergy/

New Jersey Biomass Assessment

• Courtesy of EcoComplex

Biomass is Concentrated in the Counties of Central and Northeastern New Jersey.

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.

County Totals Biomass/Sq Mile

Dry Tons/Sq MileTotal Tons

New Jersey Biomass Resources

Switchgrass, Banagrass, E grass, poplar, willow, hybridsEnergy Crops

Kitchens, Restaurants, Residential, Commercial,Processing Plants 8000Btu/lb (Dry weight)

Food Waste

By Product of crop growthIn-field residues: corn stover, wheat strawMill residues: bagasse, rice hulls, oat hulls

Agriculture Residue

Conversion of Biosolids by Anaerobic Digestion or Gasification and methane harvesting for CHP applications 600Btu/lb (Dry weight)

Waste Water Treatment

Sawmills, Pulp & Paper mills, chips, sawdust, shavings and bark ~5000 Btu/lb (Dry weight)Pallets, furniture, truss, etc ~5000 Btu/lb (Dry weight)

Primary / Secondary Wood Products

Thinning, loggingFire mitigation practices ~4250Btu/lb (Dry weight)

Forestry ResiduesSourceFeedstock

Waste Resource Summary

Permitting, equip costs


Aggregation, permitting










Primary Challenges

Gasification

Gasification

Gasification

Gasification

Gasification

Gasification

Direct combustion

Anaerobic digestion

Direct combustion

Anaerobic digestion

Direct combustion

Direct combustion

Technologies

Energy Crops

Food Waste

Agriculture Residue

Waste Water Treatment

Primary / Secondary Wood Products

Forestry Residues

Feedstock

BioPower Technologies

HighFixedCosts

Business Model Drivers

Economies of scaleEquipment supply availability

LowOperatingCosts

Maximize Asset Utilization (CF)- Wind: Physics and design - Biomass: Feedstock output & quality

Maintain plant

• High power prices

• High tipping fees

• Energy policy

Project DriversExternal Drivers

Development Process

Plan SiteControl Contract OperateConstruct

Feasibility• Resource Assessment• Plant Footprint• Permitting Requirements• Capacity sizing

• Prelim Engineering• Obtain permits:

- air (B)- water (B)- wetlands- FAA, Wildlife- zoning- construction- electrical

• Create EPC RFP• Evaluate EPC RFP• Secure financing

Engineering Engineering Filing FeesLegal Fees

LegalEngineeringFinance

• Detailed engineering• Order Equipment• Build• Test• Commission• Obtain operating

licenses

EPC ExpensesAccrued Interest

• Maximize capacity factorand energy yield

Energy SavingsREC’sTax BenefitsRebatesO&M

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

% Time

% Costs

Plan

Project Lifecycles

Plan Site Control Contract Build

Illustrative actual costs may vary

CollectionTransportationStoragePre-Processing

Feedstock ConversionTechnology

There is No Standard Biomass Project!

Paper

Wood

Food

Wastewater

LandfillGas

AnaerobicDigestion

DirectCombustion

Gasification

Power Generation Technology

SteamMicro-turbineGas CombustionFuel Cell

BenefitsCosts

• Feasibility

• Permitting

• Equipment Purchase

• Construction

• Operation & Maintenance

• Energy

• Environmental (REC’s)

• Tax Benefits

• NJOCE Incentives

• Tipping Fees (B)

• Capacity (B)

Economics Framework

5,000

1,300

2,300

2,5002,250

Low

30

40

15

1510

Variable O&M $/MWh

180

140

N/A

7070

Fixed O&M $/kW

7,000

2,700

3,800

4,0003,260

High

Capital Cost$/kW

Refuse Derived Fuel

Landfill gas

Anaerobic digestion

Biomass IGCC

Direct Fired Biomass

Technology

BioPower Facility Costs

60%Maximum incentive as a percentage of eligible system costs

$5.00 / WattIncentive LevelSystems up to 10 kW

REIP Program – BioPower Incentives

$0.15 / Watt500,001 – 1,000,000 Watts

$3.00 / Watt1-10,000 Watts

$2.00 / Watt10,001 – 100,000 Watts$1.50 / Watt100,001 – 500,000 Watts

60%Maximum incentive as a percentage of eligible system costs

Incentive LevelsSystems greater than 10 kW

BioPower Technical Considerations

• BioPower Technology depends on feedstock• Feedstock types have different characteristics that may only be

compatible for specific technologies• Not all technologies are cost effective for the feedstock• Local zoning and permitting may be a challenge for certain

applications• Most technologies are cost effective for their application• Using with Combined Heat and Power (CHP) makes it even more

cost effective

If you have any questions about this presentation or New Jersey’s Clean Energy Programs, please feel free to contact:

Mark Valori [email protected]

Phone 732-218-3411

Larry Barth [email protected] 732-218-3413

Mark Loeser [email protected]

Phone 732-218-4430

new jersey’s clean energy program · • the nj solar photovoltaic market is one of the most...

Documents