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New Jersey’s Clean Energy Program
Rutgers University
Wind Symposium
September 25, 2009
• REIP Overview
• Current Installations vs. RPS
• EPBB Overview
• Wind EPBB applications
• EPBB Calculator
• Project considerations
• Cost benefit analysis models
Presentation Overview
Agenda
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)
REIP Overview
2006 2020
Conventional Generation
MW
Hs
of
En
erg
y D
em
an
d
80,000
100,000
Expected Growth, Business as Usual and Existing Levels of Energy Efficiency
80,000
62,000
Energy Master Plan Goals
REIP Overview
Conventional Generation
2006 2020
Conventional Generation
Energy Efficiency
MW
Hs
of
En
erg
y D
em
an
d
80,000
100,000
Expected Growth, Business as Usual and Existing Levels of Energy Efficiency
Goal with 20% Efficiency 80,000
62,000
Energy Master Plan Goals
REIP Overview
Conventional GenerationConventional Generation
Energy Efficiency
2006 2020
Conventional Generation
Renewables
Energy Efficiency
MW
Hs
of
En
erg
y D
em
an
d
80,000
100,000
Expected Growth, Business as Usual and Existing Levels of Energy Efficiency
Goal with 20% Efficiency 80,000
62,000
Goal with 30% Class I Renewables, 2.5% Class II Renewables
Energy Master Plan Goals
REIP Overview
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 has dedicated $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)
REIP Overview
NJ Class I Renewable Energy
• 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.
Electric energy produced from:
REIP Overview
Renewable Energy Certificates (RECs)
• One REC certificate given per MWh of solar electricity produced
• Certificates traded on the open market
• RECs ultimately are purchased by the power generators (Load Serving Entities - LSE) to offset their requirement to produce Clean Energy
• Class 1 REC value significantly less than Solar REC
REIP Overview
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.
REIP Overview
New Jersey ProfileToday• 94 MW PV solar
• 4100 installs • 4.2 MW Biomass• 7.6 MW Wind• 1.1 MW Fuel Cells
Tomorrow• 1,600 MW Solar• 3,000 MW Offshore
Wind• 200 MW Onshore Wind• 900 MW Biomass
Government Activism Energy Master Plan NJ RPS BPU 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
Current installations vs. the RPS
New Jersey Wind Resources
EPBB Overview
Output as a Function of Wind Speed
EPBB Overview
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 Overview
30-percent tax credit for both residential and commercial renewable energy installations. Small wind is eligible up to 100 kW.
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
Note that projects greater than 100 kW are eligible for the Production Tax Credit at $0.021 per kWh for ten years.
Investment Tax Credit
EPBB Overview
• 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
Annual Estimated Production Incentive Level
1-16,000 kWh $3.20 / Annual kWh
16,000-750,000 kWh $0.50 / Annual kWh
EPBB Calculations
Renewable Energy Incentive Program - EPBB
• Wind Program Incentive is calculated based upon Expected Performance Based Buy-down (EPBB).
– Expected performance based on output• Specific turbine• Specific site
• How does the EPBB work?– Performance calculator calculates output for a given location
• Input parameters– Wind speed at 50m– System hub height– Turbine power curve
• The EPBB is designed to produce higher rebates for project which maximize power production
• More closely calibrates with goals defined in the Renewable Portfolio Standard (RPS) and the Energy Master Plan (EMP).
EPBB Calculations
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/466
88• 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
EPBB Calculations
• 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
– ARE – Entegrity Wind Systems
– Bergey – Energie
– EWP – Eoltec
– Enertech – Northern Power Systems
– Fuhrlander – Proven
– GAIA Wind– NextGen– WTIC
– Endurance– South West Wind Power– Wind Energy Solutions
EPBB Calculations
Turbine Availability vs. Turbine Size
Ava
ila
bil
ity
1kW 10kW 50kW 100kW 500kW 700kW 1.5MW 2.0MW 3.5MW
Larger turbines, MW size turbines, have a two year wait
Project Considerations
Small Wind Turbine Height Comparison
Project Considerations
Building PermitZoning NJDEP Evaluations Engineering 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
Project Considerations
• 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
Project Considerations
Model Ordinance
• The Model ordinance passed by Ocean Gate was designed to allow the development of wind projects in their community.
• It acknowledges the NJ BPU Renewable Portfolio Standard• Their current zoning regulations to not inhibit the installation of wind projects there
were unintentional barriers to developing wind projects• The Model Ordinance standardizes and streamlines the requirements for permitting
wind turbine projects• The ordinance is designed to preserve and protect public health and safety without
significantly increasing the cost or decreasing the efficiency of a wind project.• The ordinance addresses the following issues:
• Standards• Setbacks• Access
• Permit requirements• Abandonment• Administration and enforcement
Project Considerations
Renewable Energy Value Drivers
REIP Subsidy
Federal Investment Tax Credit
Accelerated Depreciation Tax Impact
Energy Value
REC Value
Capital Cost of System
Overhead & Maintenance
Other???
Cost Benefit Analysis Models
Project type comparison
Compare three different project types• Residential• Commercial• MunicipalBased on the following• 20 kW turbine• 12 MPH wind Speed at 50m• 120 foot hub height
Cost Benefit Analysis Models
Cost Benefit Analysis Models
Residential Installed Cost $90,000
Estimated Annual Output 17,596 kWh
Current electric rate $0.15 per kWh
Estimated Annual Energy Savings
$2,639.40
Rebate $51,200
Federal ITC $11,640
MACRS Depreciation No
REC Value $51 per year
O&M (Annual contract) $600
Approximate payback period
10 years
Cost Benefit Analysis Models
Commercial Installed Cost $90,000
Estimated Annual Output
17,596 kWh
Current electric rate $0.12 per kWh
Estimated Annual Energy Savings
$2111.52
Rebate $51,705.50
Federal ITC $25,500
MACRS Depreciation Yes
REC Value $51 per year
O&M (Annual contract) $600
Approximate payback period
5 years
Cost Benefit Analysis Models
Municipal Installed Cost $100,000
Estimated Annual Output
17,596 kWh
Current electric rate $0.12 per kWh
Estimated Annual Energy Savings
$2,111.52
Rebate $51,705.50
Federal ITC None
MACRS Depreciation No
REC Value $51 per year
O&M (Annual contract) $600
Approximate payback period
20 years
If you have any questions about this presentation or New Jersey’s Clean Energy Programs, please feel free to contact:
Mark Loeser [email protected]
Phone 732-218-4430