New Jersey Draft Energy Master Plan Released for Comment
The Administration of New Jersey Governor Phil Murphy released its much-anticipated draft Energy Master Plan (EMP) on June 10, 2019 which will be followed by a series of stakeholder meetings on July 17, August 8 and September 12 in Trenton, Newark and Camden, respectively. Written comments will be received up until September 16, with a final report to be issued by December 2019.
The draft EMP follows on the heels of several key administrative and legislative initiatives. Beginning with Executive Order No. 7, issued January 29, 2018, the Governor authorized the state to rejoin the Regional Greenhouse Gas Initiative (RGGI) (the state rules were finalized on June 17, 2019); and on January 31, 2018, he issued Executive Order No. 8 setting the goal of generating 3500 MW of offshore wind energy by 2030 (the first step toward this goal was taken on June 21, 2019 when the New Jersey Board of Public Utilities (BPU) announced that Ørsted was the winner of New Jersey’s first offshore wind solicitation for its 1100 MW Ocean Wind project). These actions were coupled with the enactment of a bill to authorize New Jersey to join other states in the U.S. Climate Alliance (February 2018), and the enactment of the Clean Energy Act of 2018 (May 2018) which made several important changes in the New Jersey renewable energy portfolio standards, codified the Governor’s wind energy goals, enhanced energy efficiency requirements, and enacted new community solar and energy storage programs.
By law, the EMP must be updated every three years. The last update was prepared in 2015 under the Christie Administration. As the latest draft EMP makes clear, the state now has a twofold goal: (1) reaching 100 percent clean energy generation by 2050, as announced by the Governor, and (2) reducing greenhouse gas emissions to 80 percent of 2006 levels by 2050, as determined by the Legislature under the Global Warming Response Act (GWRA).
What the Draft Plan Does and Does Not Include
The draft EMP sets forth seven strategies to achieve both goals, and by June 2020, NJDEP will be releasing a separate report under the GWRA that will describe the specific steps that the state will take to meet its goal of reducing greenhouse gas emissions by 80 percent. Concurrent with the development of the EMP, the BPU is undertaking a study pursuant to the Integrated Energy Plan (IEP) that will model several scenarios for the draft EMP strategies. The final EMP will incorporate the findings of the IEP and several other ongoing studies regarding energy efficiency, solar energy, energy storage, offshore wind energy, microgrids, alternative fuels, and other topics.
Agencies Involved and Approaches
The draft EMP was prepared by a multi-agency committee including the BPU, the New Jersey Departments of Environmental Protection, Transportation, Community Affairs, and Labor and Workforce Development, as well as the Economic Development Authority and New Jersey Transit. The objectives and strategies of the EMP are aggressive, and the text is liberally sprinkled with lofty phrases such as “dramatically broader in scope”, “rigorous goals”, “ambitious vision”, “aggressively electrify” and “bold action is necessary.” Although some deference is paid to the importance of “limiting costs wherever possible,” “reducing costs to ratepayers,” and “least cost options,” the actual cost benefit analysis is relegated to the IEP study and the GWRA Report.
Strategically, the draft EMP specifically targets the transportation and building sectors for major reductions in energy consumption and emissions, because the former is the state’s biggest source of greenhouse gas emissions (46 percent) and the latter is the state’s biggest source of energy consumption (62 percent). The goal is for near total electrification of the transportation sector by 2050, including an early focus on passenger, short and medium range vehicles, as well as heavy-duty vehicles; wide expansion of electric vehicle (EV) infrastructure; a focus on environmental justice communities; reducing vehicle miles travelled; and electrification of port and airport vehicles and equipment. At the same time, the draft proposes that “the building sector should be largely decarbonized and electrified” by 2050, first focusing on new construction and electrifying oil and propane-fueled buildings, followed by a “transition plan to a fully electrified building sector,” including a wide range of strategies to address existing buildings.
Other strategies focus on (1) the accelerated deployment of renewable energy (primarily wind and solar, and as to the latter, with an emphasis on community solar and low and moderate income communities) and “carbon neutral” distributed energy resources; (2) maximizing energy efficiency, conservation and reducing peak demand; (3) modernizing the grid and utility infrastructure; (4) supporting community energy planning and action in low and moderate income environmental justice communities; and (5) expanding the clean energy innovation economy. The draft plan expects green energy innovation and development pursuant to the seven major strategies will generate numerous jobs and create other economic benefits. Each strategy is accompanied by multiple sub-strategies, consisting of a mixture of command and control measures and economic incentives.
Public comment on the draft EMP will necessarily be hamstrung without the further detail to be provided by the multiple plans that are still under development, such as the IEP, which will model multiple scenarios designed to implement the EMP’s strategies, and the GWRA, which will provide details on how the 80 percent reduction in greenhouse gases is to be achieved. Even so, there is much to consider in the draft EMP and the stakeholder meetings and public comments are likely to be controversial given the aggressive nature of the draft.