New Jersey’s Clean Energy Program Ocean County College Wind Symposium April 7, 2009

1. New Jersey’s Clean Energy Program Ocean County College Wind Symposium April 7, 2009

2. Presentation Overview Agenda • REIP Overview • Current Installations vs. RPS • EPBB Overview • EPBB Calculator • NIMBY issues

3. REIP Overview New Jersey Profile Today • 73MW PV solar • 3650 installs • 4.2 MW Biomass • 7.6 MW Wind • 1.1 MW Fuel Cells Tomorrow • 1,500 MW Solar • 3,000 MW Offshore Wind • 200 MW Onshore Wind • 900 MW Biomass • Government Activism • Energy Master Plan • NJ RPS • BPU commitment • Renewable Resources • Wind: • Shore, highlands • Sustained winds of 11 mph • Solar: • Output ~1200 kWh AC • Biomass • Includes LFG, WWT, wood residue, food waste and aggregation of resources

4. REIP Overview Energy Master Plan Goals • To provide New Jersey with secure, safe and reasonably priced energy supplies and services. • To encourage and maintain economic growth prospects for the State. • To promote the achievement of Federal and State environmental requirements and objective in a low cost manner. (Environmental protection and impact)

5. REIP Overview Energy Master Plan Goals 100,000 Expected Growth, Business as Usual and Existing Levels of Energy Efficiency 80,000 80,000 62,000 MWHs of Energy Demand Conventional Generation

6. REIP Overview Energy Master Plan Goals 100,000 Expected Growth, Business as Usual and Existing Levels of Energy Efficiency Energy Efficiency Goal with 20% Efficiency 80,000 80,000 62,000 MWHs of Energy Demand Conventional Generation Conventional Generation

7. REIP Overview Energy Master Plan Goals 100,000 Expected Growth, Business as Usual and Existing Levels of Energy Efficiency Energy Efficiency Energy Efficiency Goal with 20% Efficiency 80,000 80,000 Renewables Goal with 20% Class I Renewables, 2.5% Class II Renewables 62,000 MWHs of Energy Demand Conventional Generation Conventional Generation Conventional Generation

8. REIP Overview New Jersey Wind Market • The required wind resource (>11mph) is along the shore and highlands. • Best example of installed project is at ACUA, similar interest building among at other coastal municipalities • Small wind projects have run into home rule issues; first model ordinance adopted by Ocean Gate. • 2009 REIP plans dedicate $7.5M to small wind projects. • REIP supports Behind the Meter (BTM) projects • Rule changes required to support Group Net Metering and Community Wind • Offshore wind evaluation is underway (summary on NJCEP and NJDEP websites)

9. EPBB Overview New Jersey Wind Resources

10. EPBB Overview Output as a Function of Wind Speed

11. EPBB Overview Output as a Function of Tower Height 9,338kWh 6,136kWh 2,709kWh 80’ 100’ 60’ (a) 10kw system; source Mick Sagrillo; “Incremental Tower Costs vs Incremental Energy”

12. EPBB Overview NJ Class I Renewable Energy • Solar technologies, photovoltaic technologies, wind energy, fuel cells powered by renewable fuels, geothermal technologies, wave or tidal action, • and/or methane gas from landfills or a biomass facility, provided that the biomass is cultivated and harvested in a sustainable manner. • Types of class I renewable energy that qualify for use in meeting the requirements of this subchapter are set forth at N.J.A.C. 14:8-2.5. Electric energy produced from:

13. EPBB Overview Net-Metering and Interconnection Standards Interconnection • State regulations that permit small generators (< 2MWs) to be installed behind the meter. • These generators cannot be sized to over produce based on current site consumption. • Mandates that utilities connect them to the grid. Net-Metering • State regulations that allow interconnected generators to offset their electric consumption with an on-site resource. • Allows production of electricity beyond site consumption to be sold to the grid and be compensated at the wholesale price of energy.

14. EPBB Overview Renewable Energy Value Drivers Other??? Energy Value Federal Investment Tax Credit Capital Cost of System Overhead & Maintenance Accelerated Depreciation Tax Impact (S)REC Value REIP Subsidy

15. EPBB Overview Investment Tax Credit • 30-percent tax credit for both residential and commercial renewable energy installations • Eliminates the prohibition on utilities from benefiting from the credit; • Allows Alternative Minimum Tax (AMT) filers to take the credit • Calculated net of state rebate 

16. EPBB Calculations Wind Incentives - EPBB • EPBB Incentive levels • This is different than the previous wind incentive level which was calculated on the capacity of the system. • Factors included in calculating annual input • Location specific wind speed • Hub Height • Obstructions within 500 feet

17. EPBB Calculations Renewable Energy Incentive Program - EPBB • Wind Program Incentive is calculated based upon Expected Performance Based Buy-down (EPBB). • Expected performance based on output • Specific turbine • Specific site • How does the EPBB work? • Performance calculator calculates output for a given location • Input parameters • Wind speed at 50m • System hub height • Turbine power curve • The EPBB is designed to produce higher rebates for project which maximize power production • More closely calibrates with goals defined in the Renewable Portfolio Standard (RPS) and the Energy Master Plan (EMP).

18. EPBB Calculations Renewable Energy Incentive Program - EPBB • Obtaining locals average annual wind speed • Wind maps for no charge are available at: • http://firstlook.3tiergroup.com/ • http://www.awstruewind.com/maps/united-states.cfm/region/46688 • http://eosweb.larc.nasa.gov • Additionally a wind resource site assessment may be performed even though the average wind speed can be determined from the wind maps • Site assessments are performed by; • Certified site assessor evaluates topography and site characteristics to give a more accurate evaluation • Engineering firm performs detailed site assessments including wind speed analysis based on anemometer readings

19. EPBB Calculations Renewable Energy Incentive Program - EPBB • Wind turbine equipment currently accepted by the program: • If a wind turbine is not presently accepted by the program the following information must be provided • Power curve based on one year of actual energy production data • Engineering certification form the manufacturer based on the power curve from an independent third party • To apply to the program applicant must complete a pre-application for guidance purposes

20. 1kW 10kW 50kW 100kW 500kW 700kW 1.5MW 2.0MW 3.5MW EPBB Calculations Turbine Availability vs. Turbine Size Larger turbines, MW size turbines, have a two year wait Availability

21. EPBB Calculations Small Wind Turbine Height Comparison

22. EPBB Calculations Wind Generating Facility: Pre Construction and Permitting Process Wind Resource Evaluation Engineering and Pre Construction Permit NJDEP Evaluations Zoning Building Permit • Determine Wind Resource and direction • Site specific evaluation (project owner) • Engineering- design and seals required • Equipment Selection • Turbine • Tower • Inverter • Pre-Construction Permit (owner) • Site Evaluation • Facility • Equipment • Turbines • Some turbines have up to a two year lead time • Facility Pre-Construction Permit process (NJDEP CAFRA review if applicable) • NJDEP is working to streamline the permitting process • Engineering drawings • Site Map • Ownership • NJDEP certifications • Local Land Use Permit • Seals & Stamps • Restrictions and variances • Building Permit • Electrical

23. EPBB Calculations Small Wind Permitting • Local • land-use • building • electrical • State (DEP): • CAFRA/Waterfront • Pinelands • Highlands • Well Drilling • Federal • FAA • Bird and Wildlife • DOD Model Wind Ordinances Adopted by 8 NJ Communities NJDEP Fast Track Proposal

24. EPBB Calculations Model Ordinance • The Model ordinance passed by Ocean Gate was designed to allow the development of wind projects in their community. • It acknowledges the NJ BPU Renewable Portfolio Standard • Their current zoning regulations to not inhibit the installation of wind projects there were unintentional barriers to developing wind projects • The Model Ordinance standardizes and streamlines the requirements for permitting wind turbine projects • The ordinance is designed to preserve and protect public health and safety without significantly increasing the cost or decreasing the efficiency of a wind project. • The ordinance addresses the following issues: • Standards • Setbacks • Access • Permit requirements • Abandonment • Administration and enforcement

25. NIMBY Issues Small Scale Wind Myth Busters • Wind turbines kill birds, bats and butterflies • Wind turbines are noisy • The towers are prone to falling over • Turbines interfere with TV and Radio reception • Wind turbines hurt property values • Turbines may throw blades or ice from the blades • Wind power is expensive and inefficient • Wind turbines only operate a small percentage of the time

26. If you have any questions about this presentation or New Jersey’s Clean Energy Programs, please feel free to contact: Mark Loeser at mark.loeser@csgrp.com Phone 732-218-4430