New Jersey’s new renewables law will take some pushing, and some cash

Source: Benjamin Storrow, E&E News reporter • Posted: Friday, May 25, 2018

New Jersey Gov. Phil Murphy (D) signed a bill yesterday to double the state’s renewable portfolio standard to 50 percent and enshrine his ambitious offshore wind targets into law.

It was a major step toward delivering on his campaign pledge to turn the Garden State into a clean energy juggernaut.

Now comes the hard part: turning ambition into reality.

New Jersey illustrates the opportunities and challenges facing states with ambitious clean energy and climate goals.

Analysts said the measure signed by Murphy provides a foundation for deep carbon reductions. Combined with a companion bill that provides $300 million in annual subsidies to the state’s ailing nuclear plants, the law should bring large amounts of wind and solar online, they said.

“If you keep your existing nuclear plants and build up your renewables, you can make substantial progress toward clean energy and climate goals,” said Jesse Jenkins, who tracks the power sector at the Massachusetts Institute of Technology’s Energy Initiative. “In contrast, if you let your existing nuclear plants retire, you may end up wasting that renewable energy growth on displacing nuclear instead of coal and natural gas.”

Others were more circumspect. Boosting the state’s renewable portfolio standard and offering subsidies to nuclear plants is likely a more expensive climate mitigation strategy than simply placing a price on carbon, said Noah Kaufman, an economist at Columbia University’s Center on Global Energy Policy.

“It’s not the most cost-effective way to do it, but it might be the only politically feasible way to do it at the moment,” he said.

It remains to be seen where New Jersey will get the large amounts of wind and solar the new law calls for. The Garden State has long been one of America’s most enthusiastic solar installers. Largely thanks to generous subsidies, the Garden State ranks fifth in the country in terms of installed solar, with 2.4 gigawatts through 2017.

Even so, New Jersey remains far from its clean energy goals.

Large-scale renewables account for 12 percent of New Jersey’s electricity sales today. Under the law signed by Murphy yesterday, large-scale renewables will need to rise to 21 percent by 2021, 35 percent by 2025 and 50 percent by 2030.

New Jersey has several avenues for meeting its targets. As a member of the PJM Interconnection, a wholesale electricity market encompassing 13 Mid-Atlantic and Midwestern states, New Jersey can look to wind and solar imports to help meet its targets. But PJM’s renewable penetration is limited. In 2016, wind and solar accounted for less than 1 percent of the region’s electricity generation.

The potential for utility-scale solar and onshore wind projects is somewhat limited by a lack of available land. New Jersey is the country’s most densely populated state.

That leaves offshore wind to shoulder much of the work. The new law calls for 3.5 gigawatts of offshore wind by 2030, the most ambitious target of any state in America. Wind offers several advantages.

Technological advancements in Europe, where offshore wind is more prevalent, have driven cost reductions. Offshore turbines also have the benefit of being close to coastal cities that account for much of the Northeast’s electricity demand.

Still, offshore wind remains years away. The industry saw progress stall in New Jersey under former Gov. Chris Christie, a Republican, even as states like Massachusetts and Maryland forged ahead (Climatewire, Jan. 16). Yesterday, Massachusetts announced it had selected an 800-megawatt project slated to begin operation in 2021.

And offshore wind figures to be expensive compared with the low wholesale prices now available in PJM, Jenkins said.

“In the short run, it’s going to be expensive,” he said. “In the long run, it may be relatively cost-effective as a climate strategy.”

Dale Bryk, a lawyer with the Natural Resources Defense Council’s climate and clean energy program, is bullish on New Jersey’s ability to meet its goals. The law also contains ambitious energy efficiency targets, requiring utilities to reduce electricity use by 2 percent annually. By reducing overall electricity supply, the efficiency measures will make it easier for New Jersey to meet its clean energy targets, she said.

All the focus on the power sector hints at an even larger challenge for New Jersey, analysts said. Power-sector emissions accounted for 18 percent of the state’s greenhouse gases in 2015, according to New Jersey’s most recent greenhouse gas inventory. Transportation-sector emissions, by contrast, represented 46 percent of the state’s carbon emissions.

State efforts in that area remain limited, they noted.

But after eight years under Christie, many greens are now happy to simply be taking a step forward.

“Through this legislation, New Jersey will reduce harmful emissions in a cost-effective manner while creating tens of thousands of jobs tied to renewables and energy efficiency,” said Barbara Blumenthal, research director at the New Jersey Conservation Foundation.

Building a clean energy juggernaut, it turns out, is a step-by-step process.