NJ's New Energy Master Plan Sets Stage for Increased Renewables

NJ's New Energy Master Plan Sets Stage for Increased Renewables

October 23, 2008 06:06

By Grace Kurdian

McCarter & English, New York Office


While states like New Jersey face worsening economic conditions and some commentators have been calling into question government’s continuing support for renewable energy and commitments to fight climate change, NJ Governor Corzine on October 22, 2008 released NJ’s long-awaited Energy Master Plan (“EMP”) that pledges the state’s commitment to these priorities and others designed to increase energy efficiency and reduce energy consumption.

Following two years of working group, stakeholder, and public meetings and opportunities for comment, the newly-released EMP sets forth the following cornerstones: (1) conservation and energy efficiency; (2) reducing peak demand; (3) creating more incentives for renewable and alternative technologies; (4) developing an energy infrastructure that allows for energy from various sources (including cogeneration and perhaps nuclear) to meet the State’s needs; and (5) investing in clean energy technologies and businesses to stimulate growth and jobs in this sector.

While recognizing the interplay of other state and regional entities, the EMP suggests actions on a local level to further the goal of attaining “reliable, competitively priced electricity” and heating fuels that are “consistent with the State’s environmental goals.”  Because the EMP establishes the policy for meeting the State’s energy needs through 2020, it affects everyone who resides or does business in New Jersey including: all energy providers in New Jersey, both regulated and unregulated, the commercial/industrial and manufacturing sector, the construction industry, financers of energy and renewable energy projects, as well as all business and residential customers.

The four goals of the EMP will be implanted through targeted action items, many of which require the assistance of the Legislature.  Perhaps the most ambitious of the goals: NJ will increase its use of energy from renewable sources even beyond the Renewable Portfolio Standards (“RPS”) that are currently in effect and draw 30% of its electricity needs from renewable sources by 2020 rather than 22.5% by renewables as would be required by the existing RPS. The EMP concludes that this provides opportunities for those in the renewable energy industry as well as those interested in investing in or implementing in such projects to carefully consider renewable projects in New Jersey. 

By 2020, NJ seeks to receive 2,120 GWh of energy from solar energy.  Wind resources will also be a ripe opportunity because the State ambitiously seeks to increase its wind resources to at least 1,000 MW of offshore wind to be installed by 2012 and at least 3,000 MW of offshore wind and 200 MW of onshore wind by 2020.  Moreover, for those interested in biofuels, the State seeks to develop 900 MW of biofuels and biomass as part of the 2020 RPS.  The EMP anticipates that the impact of the combined renewable incentives will be to spur the development of 50 MW of renewable technologies per year through 2020. 

As for the other goals, energy conservation and energy efficiency programs will be  implemented by the electric and gas utilities, and codes or standards for energy efficient new construction and for new appliance use will reduce energy consumption by at least 20% by 2020.  Specific demand response actions, including the development of demand response programs to be implemented by the utilities and finding different means of achieving reduction in peak demand for commercial (as compared to residential) customers, will reduce peak demand for electricity by 5,700 MW by 2020, according to the EMP.  Ensuring the reliable updating of energy infrastructure in coordination with regional authorities, developing additional cogeneration and investing in clean energy technologies and businesses round out the goals of the EMP.

The bottom line is that the EMP will affect everyone who conducts business in New Jersey.  Particularly for those in the energy, renewable energy, energy efficiency, construction, finance, manufacturing and commercial/ industrial sectors, now is the perfect time to consider the impact of the EMP on business and to take advantage of the opportunities raised by its stated goals and action plans.



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The business case for the development of renewable energy projects, from biodiesel and ethanol to wind, solar, and distributed generation, is more compelling than ever as tax and regulatory incentives combine to attract investments. Emerging issues in environmental law and increasingly recognized principles of corporate social responsibility are encouraging public companies to voluntarily reduce greenhouse gas emissions, install clean energy alternatives, and invest overseas in projects under the Kyoto Protocol to respond to climate change concerns.

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