Clean
Energy
Why Build Power Plants
When Cheaper, Cleaner
Alternatives Exist?
By Joel L. Shain, Esq.
NJLM Special Utility Counsel;
Shain, Schaffer & Rafanello, P.C.
ecent legislation calls for the construction of three
new large-scale generation plants to be subsidized
by New Jersey ratepayers, despite substantial opposition. The new plants would produce an estimated
2,000 mega watts of additional electricity at an increased
cost. Although touted as the solution to the shortfall of
electric capacity, parties as disparate as the Federal Energy
Regulatory Commission (FERC), the Sierra Club, and even
the Public Service Enterprise Group, Inc. (PSEG) are questioning or criticizing the plan. In this context, it’s important
to examine the wisdom of the steps taken and consider
alternatives to the state’s current path.
Those in opposition assert that large-scale merchant generation plants will increase local pollution and are likely to
produce electricity for export to neighboring New York
City. They also object to requiring New Jersey ratepayers to
subsidize construction of power when more cost effective
and environmentally sound alternatives exist. Moreover,
they state that the capacity deficit occurs on only a few
days out of the year, when demand for electricity is highest
(for an estimated total of 20 hours).
R
THE PUBLIC WORKS SECTOR
HAS ROUGHLY 750 MW S OF
EMERGENCY BACKUP GENERATION
CAPACITY THAT COULD OFFSET THE
NEED FOR NEW GENERATION PLANTS .
Instead of building power plants that will produce excess capacity when the grid
is not overburdened, we could instead provide incentives for cleaner and more
cost effective programs.
48 NEW JERSEY MUNICIPALITIES JUNE 2012
In light of the widespread opposition, several other
options should be considered. Instead of building power
plants that will produce excess capacity when the grid is
not overburdened, we could instead provide incentives for
cleaner and more cost effective programs.
One such option would be to build small, on-site (Distributed Generation) facilities, which could reduce demand at
peak times, through funding programs and public/private
partnerships. For example, the New Jersey Department of
Environmental Protection could encourage municipalities to
use their existing backup generators during peak days to
relieve strain on the grid. While using such generators would
temporarily increase greenhouse gas emissions, those emissions over the long term would be significantly less than
those created by three new fossil-fuel burning power plants.
Why Build Power Plants
Our current electricity capacity falls short on only a few days out of the year, when demand for
electricity is highest (for an estimated total of 20 hours).
Municipalities throughout the state
already have emergency backup generators to operate their water and wastewater treatment facilities when there
are power outages. Allowing the use of
these backup generators during times
of peak demand (to prevent overtaxing
the grid) could increase available power
by as much as 3-4 percent on peak days.
The public works sector alone represents roughly 750 MWs of emergency
backup capacity that could offset the
need for building new fossil fuel based
generation plants. In addition to the
water and wastewater sector, other
municipal and county facilities have
emergency backup generators that
could further supplement the peak
demand needs of our state.
Distributed Generation facilities generate electricity from many small energy sources (10 MWor less) and make
using alternative environmentally
friendly technologies more practical.
Encouraging the use of these facilities
would encourage the development of
ultra low sulfur or biodiesel fuels. Further, the use of multiple small generation facilities would increase the stability and security of the grid. These
Distributed Generators could be dispatched and operated during emergencies to provide additional energy
reserves on peak days, when traditional large generation facilities are forced
to produce more energy, creating the
most greenhouse gases. Encouraging
the development of smaller alternative
energy facilities would also stimulate
the economy across the state, rather
than in only one or two select areas.
The state, through the New Jersey
Board of Public Utilities (BPU), should
also encourage more efforts to lower
energy demand during peak periods.
Known as Demand Response, these programs involve curtailing the use of electricity instead of boosting generation.
Demand Response helps power grid
operators accommodate spikes in usage,
such as those that occur on hot summer
days. Simply put, customers offer to
reduce their consumption of electricity
at certain times, in return for being paid
the market value of the electricity they
don’t consume. The BPU could provide
incentives to offset the cost of automation and control systems, which would
result in the automatic reduction of
energy usage. Such systems lower usage
by shutting off non-essential equipment
or cycling air conditioning during peak
demand periods. The cost of these
incentives would be minimal, since
today’s technology is more cost effective
and easier to install than ever.
Another strategy our state government could use to avoid the need for
new power plants would be incentives
and financing to offset the cost of
automation and controls in buildings.
Such controls could provide permanent electric load reduction and
enable more businesses to actively
manage energy usage.
In addition, the state could consider
providing economically-viable environmental credits, basing the value of
Demand Response on the cost of producing the energy. Such incentives
would recognize the significant reduction in emissions achieved by replacing
constantly running generation plants
with the “instantaneous” Demand
Response resource. Such credits could
also promote the development of the
infrastructure necessary for customers
to participate in Demand Response
programs in the wholesale markets,
which would reduce inefficiencies in
the grid and lower gas emissions.
JUNE 2012 NEW JERSEY MUNICIPALITIES 49
Why Build Power Plants
New legislation, policy and programs
are needed to support both the use of
existing backup generators and to
provide for the installation of new or
modified natural gas or alternative
fuel-sourced generators.
Another innovation to consider is a
residential battery capable of storing
electricity in off-peak hours for use
during peak hours and to aid the grid
operator to regulate voltage quality.
By charging the battery during offpeak hours and using that electricity
during peak demand, utilities could
operate their electric generation and
distribution equipment more efficiently and reduce toxic emissions.
Finally, an Electric Vehicle Demonstration Program, which could accelerate vehicle electrification in the state,
could be considered. By supporting
demonstration projects that validate
innovative technologies to supply
electricity to these vehicles, the state
could eventually use these vehicles as
a source of supply during peak or
emergency periods. In effect, the cars
could serve to generate electricity.
Laurie Wiegand-Jackson, a former
President of the International Association of Energy Engineers and CEO of
50 NEW JERSEY MUNICIPALITIES JUNE 2012
North America Power Partners and Utility Advantage, emphasized the value to
New Jersey of a focused set of policies
promoting the reduction of New Jersey’s peak demand for electricity in a
recent speech before the Association of
Energy Authorities. She stated, “New
IF WE SEEK EVERY
AVENUE TO MEET OUR
PEAK ENERGY NEEDS
THROUGH THE POLICIES
AND FUNDING IDEAS SET
FORTH ABOVE , THERE
MAY WELL BE NO NEED
TO BUILD NEW LARGE SCALE POWER PLANTS .
Jersey once again can be the leader in
both technology and environmental
standards. Developing programs that
permit and encourage participation in
energy curtailment programs brings
long-term benefits to the ratepayers
and residents of the state. The increased
revenue streams and savings generated
from these initiatives to the corporate
and municipal entities help to grow and
maintain jobs while meeting the state’s
peak electric capacity needs and reducing our environmental footprint.”
All the demand management and
response programs suggested here are
in place in other states. Despite New Jersey’s history as a leader in efficient and
renewable energy development, we
have fallen behind. It is estimated that
over $6 billion dollars will be invested in
the Demand Response sector by 2016. A
focus on policies that promote greater
grid efficiency could significantly benefit New Jersey’s economy.
To succeed, these strategies require
the support of local leaders. Without
encouragement, the state is unlikely to
shift its course. If we seek every avenue
to meet our peak energy needs through
the policies and funding ideas set forth
above, there may well be no need to
build new large-scale power plants. ▲
The author wishes to acknowledge the assistance of Gregory B. Pasquale, Esq. in the
preparation of this article.