Grid-Connected Renewables Program

September 30, 2014

Summary

Note: The deadline for the most recent solicitation has passed and the information in this summary is specific to this closed program solicitation. The New Jersey Office of Clean Energy 2013-2014 Budget indicates additional solicitations are planned for 2013. This summary will be updated if and when a new solicitation is issued.

The New Jersey Grid-Connected Renewables Program offers competitive incentives for onshore wind and biomass electricity generation projects larger than 1 Megawatt (MW) connected to the electric distribution system serving New Jersey. Offshore wind, solar, and hydrokinetic projects are not eligible for the current solicitation, nor are landfill gas projects that inject gas into a natural gas pipeline (as opposed to generating electricity). Both publicly- and privately-owned projects are eligible for assistance under this solicitation. The application deadline for the most recent solicitation was January 8, 2010, although the program is expected to continue, so additional Requests for Proposals (RFPs) may be forthcoming.

Facilities that use emerging, commercially available technologies that maximize power production during peak demand periods, address load pocket of congestion problems with the distribution grid serving New Jersey, and are expected to begin generating electricity during 2010 will be given preference for grants. However, projects that propose new or innovative onshore wind or biomass technologies, energy storage in conjunction with currently operating Class I renewable energy facilities, or the development of bio-power feed-stocks may also apply for support. There is no minimum cost-sharing required as part of the grant as the incentive is only designed to cover a portion of the total project cost, but higher levels of cost sharing will be given preference in the evaluation process.

The bulk of the incentive offered under this program will take the form of a payment for energy production ($/Megawatt-hour) once the project is operating. The actual amount of the payment will vary by project as applicants must propose an appropriate incentive payment as part of the proposal. The program solicitation contains a schedule of recommended incentive payments based on the technology being employed and whether the project will be undertaken by a public or private entity. The recommended incentives range from $3.74/MWh for privately-owned landfill gas combustion projects to $58.49/MWh for publicly-owned wastewater biogas projects. Incentives for other eligible projects (e.g., bio-power feedstocks without associated Class I electric generation equipment, energy storage technology, or innovative technologies) will be considered on a competitive basis. The suggested incentives for public projects are 20% higher based on the inability of public entities to take advantage of tax incentives.

Generally, up to 10% of total incentive may be requested in the form of a lump grant to cover up-front costs such as financing fees, interconnection fees, project design, permitting, and construction costs. For innovative, less mature, technologies, this up-front payment may be increased to up to 20% of the total incentive. A total of roughly $6 million was available for incentives under the initial solicitation. Please see the program solicitation for additional information on program requirements, application details, and proposal evaluation criteria.