PJM evaluated the impacts to New Jersey under all the OPSI requested scenarios and in the 2014 transmission planning case. Below is a summary of New Jersey impacts observed in the scenarios:
2020
• Absent nuclear retirements and significantly higher gas prices, wholesale energy prices in New Jersey will initially be lower under the Clean Power Plan than under the 2014 transmission planning case driven by the assumed level of renewable resources and energy efficiency in the modeled scenarios rather than the Clean Power Plan itself.
• In the state-by-state compliance (OPSI 2c) analysis, New Jersey does not exceed its emissions target and, therefore, the state’s resources do not incur a CO2 price; however, due to regional dispatch, New Jersey does realize an increase in its wholesale energy price of $0.40-$0.50/MWh (just over 1 percent) relative to the regional compliance scenario (OPSI 2a).
• Modeled state-by-state compliance leads to New Jersey’s coal resources decreasing their output by 5 percent and its natural gas resources increasing their output by 7 percent relative to regional compliance.
• The state’s emissions from resources regulated under the Clean Power Plan rise nearly 7 percent compared to the modeled regional compliance scenario (OPSI 2a). Although the state has a significant amount of new sources not regulated the Clean Power Plan, the increase in natural gas generation is split between these sources and regulated sources.
8 New Jersey Building Energy Codes, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=NJ13R&re=0&ee=0
• Compared to the 2014 transmission planning case, coal generation drops significantly in the regional compliance scenarios, with the exception of the High Gas case because of higher levels of modeled renewables and energy efficiency.
• Because New Jersey’s remaining coal generation is more expensive than other regions of PJM, compared to other scenarios, it is displaced much more significantly in the 50 percent nuclear case in which the CO2
price is $13.1/ton. In the high gas case, coal generation doubles, but it is still only 5 percent of the generation mix in New Jersey.
• In 2020, the expected CO2 reductions across the region are low enough such that the energy efficiency and renewable resources are still a major factor in fuel displacement. Consequently, natural gas generation in New Jersey, like coal, is lower in the compliance scenarios than it is in the 2014 transmission planning case.
• In the 50 percent nuclear case gas generation increases 47 percent relative the 2014 transmission planning case. Not only is the emissions constraint driving redispatch to the new combined-cycle resources, but also the loss of a significant portion of the generation mix that is zero-emitting and very low cost must be replaced. By not being regulated by the Clean Power Plan, new combined-cycle resources are even more attractive in the economic dispatch as they also appear as zero-emitting. Instead of accounting for nearly 50 percent of the natural gas generation, they account for 68 percent due to existing combined cycles being dispatched down.
• In all of the scenarios New Jersey has a net positive emissions position that is used in the modeling to offset net negative positions of other states to achieve regional compliance.
• In the High Gas scenario the net positive position increases significantly because the existing combined cycles are much less competitive in the economic dispatch, whereas the opposite is true in the 50 percent nuclear case, in which gas demand from Clean Power Plan affected sources rose significantly relative to the OPSI 2a scenario.
Table 19: New Jersey Scenario Results
NJ in 2020 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4 OPSI 2c State Load Energy Cost
Total Load (MWh) 87,671,337 87,671,337 87,671,337 87,671,337 87,671,337 87,671,337 87,671,337
State LMP ($/MWh) $39.8 $37.2 $37.4 $37.8 $57.7 $50.6 $37.7
PJM Load LMP $38.3 $35.8 $36.0 $36.4 $54.5 $50.5 $36.7
Load Energy Cost
($ Millions) $3,478 $3,224 $3,243 $3,294 $5,000 $4,383 $3,263
Generation Output (MWh), Emissions (Tons) and Net Emissions Value ($)
Total Generation 71,241,616 66,905,661 65,660,042 68,025,272 61,195,612 77,466,537 69,012,665 ST Coal 1,566,757 1,143,630 1,197,271 1,139,816 3,020,238 378,422 1,082,328 Natural Gas 36,559,339 30,646,832 31,313,723 31,714,903 22,860,936 53,864,780 32,856,263
NJ in 2020 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4 OPSI 2c
Renewable Portfolio Standard and Energy Efficiency Credit for Computing Resulting Emissions Rates
Energy Efficiency (MWh) 204,020 1,039,484 1,039,484 519,742 1,039,484 1,039,484 1,039,484
• By 2025, even with more stringent emissions goals across PJM, and under-achieving the EPA assumed energy efficiency target used in the goal computation by 50 percent (OPSI 2b.2), New Jersey’s wholesale energy price decreases by $0.40/MWh relative to the 2014 transmission planning case. This reduction, in spite of Clean Power Plan compliance, is driven by the fact there are still more renewable resources and energy efficiency in this modeled scenario than in the 2014 transmission planning case.
• Although resources in the OPSI 2a and OPSI 2b.1 face a CO2 price for each short ton of emissions produced, wholesale energy prices are still below the 2014 transmission planning case driven by the assumed additional energy efficiency and renewable resources in the modeled scenarios.
• Because the CO2 targets become more stringent in 2025, the OPSI 2b.3 (High Gas) and OPSI 2b.4 (50 percent nuclear) sensitivities have an even more significant impact on wholesale energy prices. The CO2
prices more than doubles in these scenarios compared to their 2020 levels, and wholesale energy prices are about 38 and 31 percent higher, respectively, than the 2014 transmission planning case.
• With the exception of the OPSI 2a case coal generation falls relative to 2020 levels. OPSI 2a is likely an exception because the effects of higher forecasted gas prices in 2025 have a greater positive impact on coal output than the negative impacts due to the CO2 price. In the other scenarios coal generation falls between 6 and 20 percent from 2020 levels.
• Natural gas generation decreases in all modeled scenarios in the range of 1 to 14 percent, except the high gas scenario, relative to 2020. A significant amount of New Jersey’s generation comes from existing combined-cycle resources. In response to higher CO2 prices and more energy efficiency and renewable resources these units are dispatched down. An approximate 3 percent increase in gas generation relative to 2020 levels is observed in the High Gas scenario, but the total generation is still much lower than all the other scenarios.
• New combined-cycle generators not subject to 111(d) benefit from the declining CO2 emissions targets.
Relative to 2020, their share of the natural gas generation grows by more than 8 percent.
• New Jersey has a net positive emissions position across all scenarios in 2025, and this net positive position is used in the modeling to offset the net negative position of other states to achieve regional compliance.
The 50 percent nuclear scenario results in the smallest net positive emissions position as natural gas resource output is nearly twice the level observed in other modeled scenarios.
Table 20: New Jersey Scenario Results in 2025
NJ in 2025 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
State Load Energy Cost
Total Load (MWh) 89,152,591 89,152,591 89,152,591 89,152,591 89,152,591 89,152,591
State LMP ($/MWh) $53.7 $49.4 $51.7 $53.3 $74.0 $70.3
NJ in 2025 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
Renewable Portfolio Standard and Energy Efficiency Credit for Computing Resulting Emissions Rates Energy Efficiency (MWh) 204,020 5,081,923 5,081,923 2,540,962 5,081,923 5,081,923
• By 2029, even with more stringent emissions goals across PJM, and under-achieving the EPA assumed energy efficiency target used in the goal computation by 50 percent (OPSI 2b.2), New Jersey’s wholesale energy price increases by $0.90/MWh relative to the 2014 transmission planning case. This small increase, in spite of Clean Power Plan compliance, is driven by the fact there are still more renewable resources and energy efficiency in this modeled scenario than in the 2014 transmission planning case.
• Although resources in the OPSI 2a and OPSI 2b.1 face a CO2 price for each short ton of emissions produced, wholesale energy prices are still below the 2014 transmission planning case driven by the assumed additional energy efficiency and renewable resources in the modeled scenarios.
• In all scenarios coal generation is lower than its 2025 levels by between 31 and 76 percent. This is driven by the declining CO2 mass targets which push up the price of CO2 emissions.
• Gas-fired generation increases between 1 and 13 percent. The share of gas generation from unregulated new sources only rises nearly 1 percent versus 2025. The 50 percent nuclear scenario results in the smallest increase but this is only because there is not as much room for the gas generation to rise further.
• Except for the 50 percent nuclear scenario, New Jersey would have a net positive emissions position, and again, this net positive position offsets the net negative emissions positions of other states to achieve regional compliance.
• In the 50 percent nuclear scenario the net negative emissions position is offset by other states with net positive emissions positions under this scenario.
Table 21: New Jersey Scenario Results in 2029
NJ in 2029 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
State Load Energy Cost
Total Load (MWh) 90,311,509 90,311,509 90,311,509 90,311,509 90,311,509 90,311,509
State LMP ($/MWh) $63.2 $57.1 $61.3 $64.2 $91.3 $83.1
PJM Load LMP $61.0 $55.2 $59.7 $62.9 $88.0 $84.0
Load Energy Cost ($ Millions) $5,697 $4,698 $5,046 $5,539 $7,518 $6,839 Generation Output (MWh), Emissions (Tons) and Net Emissions Value ($) Total Generation 73,926,541 63,092,717 64,213,200 71,998,494 63,413,630 78,541,287 ST Coal 3,405,697 547,046 328,242 227,044 1,656,930 144,409 Natural Gas 37,314,857 26,690,185 31,524,665 35,278,521 25,776,802 53,859,866 Natural Gas CC 36,195,009 25,867,335 30,377,455 34,047,484 24,647,831 48,190,448 Natural Gas CT 943,676 795,630 1,067,879 1,191,920 1,107,304 5,502,797 Natural Gas ST 176,172 27,220 79,331 39,118 21,668 166,621 Nuclear 27,956,482 27,470,986 27,314,419 27,795,737 27,494,724 16,059,365 Renewables 4,674,301 7,996,077 4,676,404 8,331,876 8,043,871 8,085,938 Other 575,204 388,424 369,471 365,316 441,303 391,709
New Source Performance Standard 111(b) Resources:
NJ in 2029 RTEP OPSI 2a OPSI 2b.1 OPSI 2b.2 OPSI 2b.3 OPSI 2b.4
Renewable Portfolio Standard and Energy Efficiency Credit for Computing Resulting Emissions Rates Energy Efficiency (MWh) 204,020 7,977,438 7,977,438 3,988,719 7,977,438 7,977,438
Most of North Carolina’s load is external to PJM, and served by other balancing authorities. The portion that is in PJM represents less than 1 percent of PJM’s total load. The generation used to set North Carolina’s proposed emission rate goals that is also in the PJM footprint represents a fraction of the load in the PJM footprint. Similar to other states whose load is served by multiple balancing authorities, PJM calculated the rate and mass goals using the EPA methodology applied only to the generation and load within the PJM footprint. The wholesale energy market impacts discussed below do not account for capital costs associated with renewable resources, energy efficiency, or new combined-cycle gas resources. Such costs may appear in retail electricity rates as determined by state commissions, but such determinations are beyond the scope of this analysis. Moreover, the simulation results discussed below do not attempt to draw any conclusions on wholesale capacity market outcomes.