The Paradigms - They are a-Shiftin'

by: deciminyan

Tue Oct 25, 2011 at 06:30:00 PM EDT

When we flip on a light switch in our homes, few of us think about the ramifications. Electricity is relatively cheap, so we don’t think of the cost. Most of the time it’s available on demand, so we don’t think about reliability or distribution, and since we don’t see the pollution that resulted from its production, we don’t usually think about the environment. We just flip on the switch, and there’s light.

But at times, we’re all aware of some of the problems and pitfalls in lighting and heating our homes. We experience power outages, usually attributable to extreme weather. We gripe about our electricity bills, especially during the summer months when our air conditioners run non-stop. We see the environmental cost with dirty air from coal-burning plants and the ever-present threat of a Three Mile Island or Fukushima Daiiachi disaster in our back yard.

The paradigms about the generation and distribution of electrical power in New Jersey are shifting. It’s not just the move from reliance on dirty fossil fuels to clean energy sources. We also must take into account the need for energy storage to account for the time difference between when renewable energy is available (like solar during daylight hours) and when it is consumed (for example, at night or during overcast days.) We need to recognize that the generation of renewable energy is not done at a few large capital-intensive power plants, but is more of a geographically distributed entity, one which our transmission systems and regulations may not be optimized for. And we need to look into the future where electric vehicles will become more prevalent, resulting in more consumer demand for power in the home, and access to power-hungry recharging stations along the state’s thoroughfares.  The cost of solar power is becoming lower than that of nuclear, and with the closing of the Oyster Creek nuclear plant in 2019, a large chunk of the state’s indigenous generation capacity will need to be replaced. And a new player, geothermal energy, is becoming a viable way to heat and cool our homes (for more on geothermal, go to the 4:00 mark in the Chivukula video, below.)

New Jersey is a leader in the exploitation of pollution-free solar energy. We are second only to California in the amount of electricity we generate from the sun. Much of this is due to the leadership of our legislators in designing financial incentives that encourage the development and deployment of solar power. But our success is causing some problems, and those are what Assemblyman Upendra Chivukula, Chair of the Assembly Telecom & Utilities Committee, addressed today in Trenton.

So bear with me here. To really understand the technopolitical energy landscape in New Jersey requires the skills of an engineer, economist, and soothsayer.  I qualify only in one of those categories.

One of the incentives to developing solar power involves  Solar Renewable Energy Certificates or SRECs. Paid for by a small surcharge on our utility bills, SRECs are granted to the companies that generate the renewable energy – a kind of rebate.  Utilities are required to buy SRECs if they don’t meet certain renewable energy standards. The price of SRECs is market-driven.

The problem we have today is that there is a glut of SRECs on the market, driving down their value. Not only does this mitigate the incentive for development of solar power, but volatility in SREC prices is not conducive to long-term planning that is needed for financing some of these projects.

To calm a jittery market and maintain New Jersey’s energy momentum, Assemblyman Chivukula held a stakeholder’s meeting today in Trenton. Originally scheduled for a hearing room with a capacity of 75 attendees, the meeting had to be moved to another room, more than twice that size, and still all the seats were occupied. Attendees included businesspeople, administration officials, environmentalists, and maybe a couple of other reporters/bloggers. Joining Chivukula was Assemblyman Dan Benson.

After hearing from businesspeople and administration officials, Chivukula and Benson talked to Blue Jersey about the hearings. Benson’s interview gives an overview of the energy situation in the state, and Chivukula talks about the specific legislation he is introducing.

(more below the videos) 

While all parties agree that we need to adjust to these new paradigms, tactics may differ. The Christie administration looks at energy policy through an ostensibly pro-business lens and downplays the environmental factors. Others, such as Chivukula, look at opportunities to exploit game-changing technologies while protecting the environment and consumers. While there’s some common ground, both sides need to work together, and the public needs to be better informed. To that end, Assemblyman Chivukula will be posting diaries to Blue Jersey (after the election) explaining the technology and economics of energy production and distribution. I look forward to learning more about the changing landscape of New Jersey’s energy market.