Last week, the New Jersey Board of Public Utilities (NJBPU) voted to
approve new regulations that expand the State's Renewable Portfolio
Standard (RPS) by extending the existing goals out to 2020 and vastly
increasing the required amount of renewable energy and solar energy.
Under the newly adopted regulations, 20 percent of New Jersey's
electricity must come from renewable sources by 2020. The new regulations
also include a 2-percent solar set-aside, which is forecast to require
approximately 1500 MW, the nation's largest solar commitment relative to
population and electricity consumption. The new goal will continue to spur
market development and is considered the largest solar goal in the country
on a per capita basis (exceeded only by California, which is four times
the size of New Jersey in population and electricity consumption).
The change up to 20 percent reflects an enormous new show of support for
renewable energy from the Northeast state. New Jersey, in fact, has had a
renewable energy mandate on the books since 1999 when the electricity
market was deregulated. At that time, the RPS was set at 4 percent to be
reached by 2012, then in 2003 the 4 percent target was changed to be met
four years earlier by 2008, according to Suzanne Leta, Energy Advocate for
the New Jersey Public Interest Research Group (NJPIRG).
With this latest regulatory move, the NJBPU took a giant leap to a 20
percent standard, the likes of which is only matched by trend-setting
California.
"The broader picture here is that the state is doing a really good job
trying to create a diverse and competitive renewable energy market," Leta
said.
New Jersey is in a unique position with respect to the entities that will
be mandated. Since de-regulation, all of the electricity generation is
privately operated and managed. The mandate, therefore, will fall upon the
companies that control electric transmission and distribution (T&D) in the
state, which are largely controlled by large, publicly traded holding
companies. If these T&D entities don't meet the mandate for an increasing
percentage of the power they carry to come from renewable energy, fines
will be imposed.
The next step, says Leta, is for the state to ensure its solar rebate
program is adequately funded to keep up with growing demand, either from
residents and businesses who elect to install solar photovoltaic (PV)
panels, or from extra demand created from the mandate.
And the RPS goes well beyond solar. The two-tiered mandate program will
likely be met largely by new wind power developments and biomass
incinerators. There's also a likelihood, Leta says, that the state's new
policy will be what drives the commercial deployment of ocean energy
projects such as wave or tidal power.
To meet the goals, the RPS mandates the use of Renewable Energy
Certificates for compliance. The proposed rule change was published in the
New Jersey Register on October 17, 2005, accepted written comments for 60
days and received a public hearing on December 6, 2005.
"Strengthening the RPS will ensure the continued transformation of New
Jersey's energy market," said NJBPU President Jeanne M. Fox. "Increased
use of renewable resources and specifically solar photovoltaics will
provide greater fuel diversity for New Jersey, while simultaneously
reducing price volatility, strengthening the economy, improving public
health and reducing greenhouse gases that threaten our shoreline."
