New Jersey Energy Resilience Bank. New Jersey Association of Energy Engineers 2015 Energy Forum

Transcription

1 New Jersey Energy Resilience Bank New Jersey Association of Energy Engineers 2015 Energy Forum May 28, 2015

2 SECTION 1 Introduction to the ERB The State of New Jersey 1

3 Critical facilities were significantly impacted by power outages from Superstorm Sandy The loss of facilities as well as public safety and emergency vehicles caused increased response times for fire and medical services, further endangering local residents. Hospitals, nursing homes, long-term care facilities, domestic violence shelters, foster homes, mental health facilities, and other critical social service providers throughout the State were forced to contemplate evacuation in light of prolonged power outages. Flood waters and power outages forced at least 370 school districts to close for at least one week. 427 of 604 community water systems experienced power loss during the event. As a result of these service interruptions, water quality was compromised. Boil water advisories were issued by 37 water systems, impacting 362,334 New Jersey residents. Even those critical infrastructure and assets reliant on diesel generators for back-up power experienced electric reliability issues, due to limitations on the availability of liquid fuel. Petroleum production, transport, distribution, and retail sales were also significantly impacted... Over 70 percent of gas stations in northern New Jersey were unable to operate for as much as a full week after the storm. SOURCE: DCA, Hurricane Sandy Rebuilding Strategy Task Force The State of New Jersey 2

4 Some facilities were able to continue operating thanks to their resilient energy systems Resiliency benefit Continued operations Shelter for Emergency Sample cases Several medical facilities were able to maintain power through CHP micro-grids, becoming larger shelters as well as accepting patients from other facilities Bergen County Utilities Authority (BCUA) was able to operate its sewage facilities both during and after the storm by relying primarily on a biogas-powered CHP system College of New Jersey s CHP micro-grid provided heat, power, hot food and hot showers to 2,000 mutual aid workers from other states that helped to restore power after the storm Additional financial savings Princeton University s combined heat and power (CHP) microgrid operated for a week when the larger grid failed, saving the University millions in documented avoided loss in hundreds of hundreds of irreplaceable research projects SOURCE: DCA The State of New Jersey 3

5 New Jersey Energy Resilience Bank (ERB) Overview The extensive damage and outages caused by Superstorm Sandy prompted the state to prioritize its efforts to minimize the potential impacts of future major power outages and increase energy resilience. BPU and EDA have partnered to commit $200 million in funding for the ERB to assist critical facilities with securing resilient energy technologies that will make them and, by extension, the communities they serve less vulnerable to future severe weather events and other emergencies. The State of New Jersey 4

6 Mission Realizing energy resilience for New Jersey s critical facilities through financing and technical assistance The State of New Jersey 5

7 SECTION 2 Identifying Critical Facilities The State of New Jersey 6

8 Critical facilities based on list compiled by the state s Office of Homeland Security and Preparedness Tier 1 Life safety Emergency operations centers Fire department/ EMS/ Rescue Fuel retail stations along evacuation routes Hospitals & Long term care facilities Police Department Public Safety Answering Points (PSAPS) Shelters (facilities are cross-sector) Water/ Wastewater Tier 2 Critical infrastructure lifeline Communications, Cellular and radio Food Retail and distribution levels Fuel Distribution and wholesale levels Retail banking Transportation Tier 3 Outstanding sectors All other sectors The State of New Jersey 7

9 Wastewater Treatment Plants Deep Dive The State of New Jersey 8

10 Wastewater Treatment Plants Deep Dive The State of New Jersey 9

11 Wastewater Treatment Plants Deep Dive The State of New Jersey 10

12 Healthcare demand should be strong Technical Bucket Sector sophist. CHP fit Market size 1 A Healthcare Education/ shelters Hospitals: ~115 Long-term care facilities: 775 Colleges and universities: ~170 Elementary/middle/high schools: ~3,700 Expected market demand Strong Several hospitals have expressed interest Likely significant demand with 3 rd party developers Strong incentive to reduce energy costs and value resilience Medium Several universities with existing resilient systems Numerous benefits: cost savings, shelter, protect data B Public Housing Transport Others 2 ~330 public housing facilities NJT train stations ~170 NJT bus garages and terminals: ~40 Public Safety Answering Points (PSAPS): ~570 Police departments: 490 Prisons: 13 Weak CHP costly for small loads Small and inflexible budgets Relatively low criticality Medium NJT prefers significant funding chunk Limited other facilities within sector Weak CHP costly for small loads Minimal thermal load Small budgets 1 All public, private, non-profit in the state of New Jersey 2 Includes emergency operations centers, fire department/ems/rescue, police departments, Public Safety Answering Points (PSAPS), prisons The State of New Jersey 11

13 SECTION 3 Financing Energy Resilience The State of New Jersey 12

14 The ERB currently has two sources of funding at its disposal, each with its own conditions Source HUD Other Public & Private Sources Allocated amount $200M to be spent by 2017 Status Limited to public, non-profits, and small businesses that satisfy the SBA definition Requires that 60% of funds be used for LMI, & ~80% for most impacted communities Awaiting decision on SBA waiver, submitted Fall 2014, which would allow HUD funds to be used for large private facilities and developers Currently applicable for public, nonprofit, and small businesses that satisfy SBA definition SBC funding may be available on a case-by-case basis Possible EDA bonds Private Banks The State of New Jersey 13

15 Product terms will consider resilience benefits in addition to economic benefits Economically Positive Investment Energy Savings + ERB Incentives - Incremental Cost of Islanding - Sizing for Resilience + Resilience Benefits Avoided Revenue Loss + Avoided Litigation/Liability Cost + Lives Saved + Environmental Benefits = Economically healthy and resilient facilities will function during a storm or disaster The State of New Jersey 14

16 Energy savings and attractive financing terms can make resilient systems viable Resilient CHP economics Area, sq. ft 663, , ,370 3,400,000 Generator size 1, Kw 2,050 2,350 3,600 8,375 Generator capex, $ 6,583,668 8,358,623 10,512,061 21,203,173 Annual Net energy savings 2, $ ~900k ~800k ~1.6M ~3.1M Baseline NPV 3, $ 525,611 (761,954) 2,846,524 (1,723,681) ERB baseline NPV 4, $ 1,514, ,185 3,355, ,751 1 Sized to average electric load 2 Includes electricity savings and increase in natural gas purchases 3 No islanding cost included; 100% funded by market debt at 5% interest rate with 15 year term 4 30% CHP grant included; 100% funded by market debt at 5% interest rate with 15 year term SOURCE: Team Analysis; CEEP, DOE, CEP The State of New Jersey 15

17 The ERB will support water and wastewater treatment plants with comprehensive financing for resilience projects Overview of Proposed Total ERB Funding for New Builds Program size Eligible facilities $65M, which would cover 10 projects, with an average project size of ~$6.5M Water and Waste Water Treatment Plants 100% unmet funding Incentive: Loan: 20% Grant: Percentage of unmet funding need provided as a grant 20% Loan Forgiveness: Percentage of unmet funding need available as a loan that may be forgiven based on performance-based standards. Loan forgiveness spread over 5 years 60% Loan Terms Interest rate: 2% IG, 3% non-ig Collateral: Unsecured Term: Up to 20 years, based on useful life of assets Principal Moratorium: Up to 2 years principal moratorium The State of New Jersey 16

18 SECTION 4 Resilient Energy Solutions The State of New Jersey 17

19 ERB Support for Critical Facilities will Support Distributed Generation at the Customer Site ILLUSTRATIVE Grid side Customer equipment Electric grid Meter Power generation Distributed generation: Combined heat and power Fuel cells Solar panels & storage The State of New Jersey 18

20 The ERB will Fund Resilient Energy Systems for Critical Facilities RESILIENT TECHNOLOGY IS RESILIENT TECHNOLOGY IS NOT distributed generation or other technologies CHP plants can use a reciprocating natural gas engines Gas Turbine CHP Plant emergency backup generators that is islandable, capable of blackstart and can operate at critical load Inverter system Black Start Controls Fuel Cells Generator SOURCE: DOE, NREL The State of New Jersey 19

21 The ERB can Cover a Range of Costs ELIGIBLE COSTS New Resilient Systems Core equipment Piping & wiring Islanding equipment Interconnection Fuel pre-treatment (e.g., biogas treatment, or gas compression) Installation Site work Engineering and project management Hardening of resilient energy system (e.g., elevation) NON-ELIGIBLE COSTS Backup Generators Emergency backup generators Onsite fossil fuel storage for emergency generators Other non-energy hardening Flood walls Elevation Other Used, refurbished equipment Solar PV panels The State of New Jersey 20

22 SECTION 5 Eligibility The State of New Jersey 21

23 Scoring Criteria Tech. Efficiency / Economic Cost Effectiveness LMI National Objective Most Impacted Communities Readiness to Proceed Criticality Microgrid Facility Energy Efficiency The State of New Jersey 22

24 Application Overview Outreach / engagement Intake application Full application Technical review Financial / Federal requiremt. review Board consideration Closing Construction and monitoring External approvals (e.g., NEPA, air and water, public bids and other DEP review) Some steps in the application process will take place concurrently The State of New Jersey 23

25 SECTION 6 ERB s Future The State of New Jersey 24

26 The Future 4 Tax Equity Investor (Asset Mgmt, HF) Lease payments Asset sold Lease back Developer/ESCO (SPV) Payment 2 Guar/Grant/Loan Lease Payments (ESA) Asset Installation 1 HUD CDBG- DR funds Revolving funds ERB (Revolving Funds) Direct loans/grants Repayments Facility Guarantee Payment 3 Private sector bank (e.g., TD, M&T) Direct loans Repayments Direct Grant/Loan: ERB provides grant/loan directly to facility, funded through ERB own funds or on-lended through relationship with funding partner (e.g., DOE, FTA, NRG, PS) Developer/ESCO financing: ERB provides guar/grant/loan to developer, which owns generation asset and contracts with facility through Energy Services Agreement (ESA) Guarantee with 3 rd party bank: ERB provides guarantee to premier lender bank and/or subordinated loan to facility to encourage 3rd-party lending Tax Equity Structure: ERB lends to SPV set up by developer and facility The State of New Jersey 25

27 SECTION 7 Thank You The State of New Jersey 26

28 ERB Contacts Mitch Carpen 36 West State Street Trenton, NJ phone: web: njerb.com The State of New Jersey 27