New Jersey proposes energy storage incentives to reach 2GW deployment target

LinkedIn
Twitter
Reddit
Facebook
Email

The New Jersey Board of Public Utilities has proposed a number of policies to incentivise the deployment of standalone energy storage, to help hit a 2GW target.

The US state has statutory mandates for deployment, of 600MW by the end of 2021 and 2,000MW by 2030, though only 497MW has been deployed and 420MW of that is a pumped hydro facility (as fas as the Board is aware).

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

But, it said, energy storage investments that would save bill-payers money often do not get built because developers “…generally can only monetise a fraction of the benefits they produce”.

The Board is proposing to create separate energy storage programmes creating incentives for front-of-meter (FTM) and behind-the-meter (BTM) energy storage projects connected to New Jersey’s electric distribution companies (EDC).

The incentives will only apply to projects going online after the programme is implemented. FTM and BTM are being grouped into two market segments; Grid Supply and Distributed/Customer Level, respectively.

At least 30% of the incentive will be in the form of a fixed annual incentive, paid in US$/kWh of energy storage capacity continent on up-time performance metrics, the Board said.

It will be established through a declining block structure to establish a market-based incentive while also providing the industry clear insights into the incentive value for energy storage resources. There will be different pricing structures for each market segment.

The remainder of the incentive programme will be a pay-for-performance mechanism.

For Grid Supply projects, payment will be based on the amount of carbon emissions abated through operation of the energy storage device. This will be calculated using the marginal carbon intensity of the wholesale electric grid (set by grid operator PJM) at the time the energy is discharged, minus the carbon intensity of the energy drawn during the charging interval.

In essence, this means the more renewable load shifting that the energy storage unit does, the more it will be paid. While energy storage units today do as much as 6GWh of load shifting a day in the California market as of February, little of this has been shifting renewables.

For the Distributed/Customer Sited segment, payment will be based on the successful injection of power into the distribution system when called upon by the EDC during certain performance
hours. A portion of the Distributed storage incentive will also be reserved for projects located in or directly serving overburdened communities.

Eligibility for the incentive programmes will be technology-neutral and based only on meeting functional
requirements in a cost-effective manner, the Board added.

The Board is also proposing that private investors be allowed to own and operate the energy storage devices, allowing them to stack revenues from multiple sources.

These would include the wholesale electricity market for Grid Supply projects and, for the Distributed segment, utilising energy storage to actively manage their energy usage to reduce electricity costs or to participate in a Distributed Energy Resource (DER) aggregation service.

The programme is designed to provide ratepayers in the state with a variety of benefits, the Board said. These include carbon savings, hosting capacity improvements and improving system resilience.

Read the whole Straw Proposal, contained in the ‘In the matter of the New Jersey Energy Storage Incentive Program’ notice here.

18 March 2025
Sydney, Australia
As we move into 2025, Australia is seeing real movement in emerging as a global ‘green’ superpower, with energy storage at the heart of this. This Summit will explore in-depth the ‘exponential growth of a unique market’, providing a meeting place for investors and developers’ appetite to do business. The second edition will shine a greater spotlight on behind-the-meter developments, with the distribution network being responsible for a large capacity of total energy storage in Australia. Understanding connection issues, the urgency of transitioning to net zero, optimal financial structures, and the industry developments in 2025 and beyond.
26 March 2025
Austin, Texas
The Energy Storage Summit USA is the only place where you are guaranteed to meet all the most important investors, developers, IPPs, RTOs and ISOs, policymakers, utilities, energy buyers, service providers, consultancies and technology providers in one room, to ensure that your deals get done as efficiently as possible. Book your ticket today to join us in 2025!

Read Next

February 14, 2025
The Nature Conservancy (TNC), Sun Tribe and ENGIE will deploy a solar and battery storage portfolio at former coal mine sites in the Appalachians, US.
February 12, 2025
IPP Cordelio Power has procured over 1GWh of battery energy storage system (BESS) equipment with US-headquartered energy storage system integrator and renewable energy services provider Fluence Energy.
February 11, 2025
Virtual power plants (VPPs) are networks of small-scale, distributed energy resources, such as solar panels or batteries (and in some instances vehicles) which can together function as a single power plant, providing stability to the electric grid.
February 7, 2025
A US-focused edition of energy storage news in brief, with large-scale BESS, vehicle-to-grid and optimisation updates.
Premium
February 4, 2025
The Board of Supervisors (BoS) of Orange County, California, has enacted an emergency moratorium on the approval of any new BESS facilities proposed for unincorporated areas of the county in order to protect the “health, safety and welfare” of its residents. 

Most Popular

Email Newsletter