By Liz Burdock
Winning bids are expected to be announced this month for development of the first 1,100 megawatts of offshore wind power in New Jersey, a project that will generate enough pollution-free electricity for about half a million homes.
A new registry is now underway to make sure that companies based right here in our state are tapped for the construction supply chain.
And the start of construction is now just a year or two away, with over 10,000 jobs possible over the next decade as the planned total of 3,500 megawatts of offshore wind energy is built out. Offshore wind is a key component of New Jersey’s plan to source half its electricity from renewables by 2030, and 100 percent from clean energy by 2050. It’s one of the most ambitious plans in the nation.
While there’s no question where the Garden State is going on energy, there is the question of how the organization that manages our regional electric grid --PJM Interconnection -- can help us get there.
From its headquarters outside of Philadelphia, PJM operates the nation’s largest network of power lines, delivering energy to 13 states from Illinois to North Carolina. It also runs wholesale energy markets that determine which sources provide power to local utilities -- and the price customers pay for that power on their monthly bills.
In many ways, PJM is a significant player that has been out of public view until now but could really make New Jersey’s energy cleaner and cheaper. The sheer size of the network means that we can draw on additional renewables from outside of the state when our demand is high and export our own sources to other states when demand is low. And PJM’s markets allow energy sources to compete on the basis of cost to keep energy bills down for consumers -- the cheaper a source is to produce, the more likely it will be selected to provide power.
At a high level, PJM’s markets are pretty simple. Up close, they are shrouded in a haze of details and rules that can mystify even the most experienced energy policymakers. And fossil fuel interests are taking advantage.
For example, coal and gas generators are pressuring PJM to skew the rules of their “capacity” market -- a market where sources compete to supply our future energy needs -- in order to limit the contributions of clean energy sources that have been prioritized by states.
There is a case pending right now before the Federal Energy Regulatory Commission (FERC) to decide on these market rule changes. If the fossil fuel lobby gets its way, achieving state clean energy goals would become more difficult -- and New Jersey consumers could end up paying for more expensive, polluting power they don’t need.
The fact is that the rules of PJM’s capacity market are in desperate need of reform; they need to catch up with an age where the most efficient and most reliable grid is one that includes more low-cost renewables in the mix. The capacity market of the future would make room for lower-cost portfolios of solar, wind, and clean, flexible resources.
Ultimately, if PJM’s capacity market ends up not accommodating the sources that are central to achieving both New Jersey’s clean energy goals and the lowest price for consumers, then the state needs to advocate for a workable alternative.
One option is for New Jersey utilities to fulfill most of our capacity needs from clean sources directly, and then subtract that from what we’re required to buy through PJM. New Jersey’s Board of Public Utilities and other state energy leaders will need to be at the ready to make any policy changes needed to ensure that market rules don’t get in the way of New Jersey’s clean energy goals.
In an era when the Garden State is looking to lead on clean energy — to address pollution, slow climate change and grow the economy — we need PJM to be a tailwind for our energy goals.
Liz Burdock is president and CEO of the Business Network for Offshore Wind.
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