New Jersey’s decision to exit the Regional Greenhouse Gas Initiative (RGGI) has raised more questions than it has answered.
One outstanding issue has definitely been answered, though, at least from Christie’s perspective: There will be no more coal-fired electricity in New Jersey.
Governor Chris Christie announced late last week that NJ would withdraw from the ten-state cap and trade emissions program by the end of 2011. It’s a decision that, he said in his announcement, is not intended to end the state’s involvement in energy efficiency and clean energy programs.
“We have an obligation to reduce our greenhouse gas emissions, and we’re going to do it in the concrete ways that I’ve laid out here today,” Christie said. “We’re not going to do it by participating in gimmicky programs that haven’t worked. And, you know, in the end, our view is it’s better to do things the right way than to do things the politically correct way.”
RGGI is a non-profit that has brought together 10 northeastern states to cap and manage trade in carbon dioxide emissions. The states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. Allowances for emissions beyond a set cap are sold in an auction, awarding companies that reduce emissions.
According to Christie, his efforts to massage development of solar, offshore wind, and natural gas power have had a far greater impact on reducing emissions than RGGI. He added that the cost of emissions in the RGGI program has fallen significantly to a meager $2 per ton, a price that may have little impact on decision-making when it comes to generation.
“Reduced emissions have been due to increased use of natural gas, and the decreased use of coal. We’re seeing that the market and not RGGI has created incentives to reduce the use of carbon-based fuels.”
Christie’s decision was also impacted by competition from cheaper electricity generated in Pennsylvania, a state rich in coal resources that does not participate in RGGI.
“By making the cap too stringent clean New Jersey plants would be forced to close, only to be replaced by power from dirty Pennsylvania coal plants,” he said.
How Come He Doesn’t Have to Do It?!
With NJ power generators set to be free of the carbon caps next year other states in the region may also face increased competition and could therefore also choose to quit RGGI.
But according to PJM Interconnection spokesperson Ray Dotter, the regional transmission organization that manages, among other states the NJ grid, NJ is not the most significant source of power in the region and its decision may have little impact on other states.
He said, “there are too many variables there” to make an accurate prediction about the impact on other states and the market in general.
Efforts to expand power delivery from New Jersey renewables won’t necessarily impact the cost of power in the region, he said. That being said, Christie is planning on expanding NJ natural gas plants while at the same time shutting off all funding to coal power.
“From this day forward any plans that anyone has regarding any type of coal-based generation of energy in New Jersey is over,” Christie announced. “We know that coal is a major source of CO2 emissions. We will no longer accept coal as a new source of power in the state and we will work to shut down older dirtier, peaker and intermediate plants that emit high greenhouse gases.”
Another unknown variable for the states is federal and state policy, which may include incentives for renewables development and penalties for conventional generators. Either way, NJ’s early decision to quit RGGI could give it an early-start economic advantage in light of those policies.
A Clean Energy Future Without RGGI
Christie’s announcement was couched in a litany of promises for clean energy policies, who insisted that it would be productive to encourage renewables rather than penalize generators for dirty emissions.
Along with current plans for major investment in development of offshore wind (Christie signed the Offshore Wind Economic Development Act last year and only a month ago decided to go ahead with 1,100MW of offshore turbines), solar power (the NJ Meadowlands Commission has recently rezoned various landfills for solar development), and natural gas (NJ recently partnered with LCAPP for increased production of natural gas), the state is also emphasizing energy efficiency. Christie also announced the opening of the State Energy Savings Initiative Oversight Committee, whose aim will be to increase efficiency and lower electrical bills of various facilities across the state.
“It’s this administration’s belief that the cleanest energy is the energy that we don’t use,” Christie said.
To that end, the state is also set to release its Energy Master Plan within the next few weeks.
“[The plan] will guide a lot of decisions going forward,” said Deputy Press Secretary of Governor Christie’s office, Kevin Roberts. No matter what, the plan will exclude RGGI.
Watch Christie’s announcement on Breaking Energy.
Picture: NJ Governor Chris Christie speaks.