QO22080540-

Key financial and timeline risks and concerns discussed in the docket include:

- Short implementation timelines: Stakeholders widely argued that the proposed 550-day window from award to commercial operation is too short, citing the lengthy interconnection process and recommending timelines of 30 to 60 months to reflect real-world development constraints. Delays in interconnection and permitting were highlighted as significant risks to project viability 1.

- Financial security and fee structures: There were differing opinions on application and participation fees. Some stakeholders supported non-refundable fees and significant pre-development securities to deter speculative bids, while others argued for refundable fees to encourage broader participation and avoid deterring viable projects. Aggressive fee or clawback provisions were seen as potentially increasing financing costs and project risk 1.

- Project maturity requirements: Calls were made for stricter standards, such as requiring a completed system impact study for grid-supply projects and a fully approved interconnection agreement for distributed resources, to ensure only viable projects are selected. However, concerns were also raised that too-rigid criteria could exclude projects due to factors outside developers’ control 1.

- Uncertainty over future program sizing and incentives: The state’s year-by-year appropriation process makes establishing future program size and certainty in incentive levels challenging, adding risk for developers planning multi-year investments 1.

- Financing and market risks: Delays or lack of clarity in incentive design, performance criteria, and compensation structures could undermine project financing and development timelines. Concentrating incentives on already-queued grid-supply projects was also seen as a risk to diversity and overall program return on investment 2.

- Risk of regulatory changes: Freezing or rolling back clean energy requirements, such as the RPS, was cited as a risk to project timelines, private investment, and overall market confidence 3.

In summary, stakeholders highlighted that tight timelines, inflexible financial requirements, uncertainty in program design, and regulatory instability are key risks that could impact the success of the New Jersey energy storage incentive program.

The docket for the New Jersey Energy Storage Incentive Program (SIP) identifies several key areas of growth, each with specific considerations:

1. Expansion of Energy Storage Targets and Capacity
- Growth: There is advocacy for increasing the state's energy storage procurement target from the current 2,000 MW by 2030 to 4,000 MW by 2030 and gradually to 6,000 MW by 2035, to align with New Jersey’s clean energy goals and grid modernization efforts 1.
- Key Considerations: Achieving this expansion requires robust, effective, and well-run incentive programs to quickly add capacity and support the transition to a carbon-free grid.

2. Diversification of Storage Technologies
- Growth: The docket highlights the need to broaden the definition and deployment of storage beyond battery electric systems to include options like thermal energy storage and other innovative technologies 2, 3.
- Key Considerations: A more holistic approach is seen as essential for achieving decarbonization at the lowest cost, increasing grid flexibility, resilience, and system benefits.

3. Focus on Distributed Resources and Market Segmentation
- Growth: There is a push to allocate more SIP resources and incentives to distributed energy storage (e.g., behind-the-meter, non-residential, and residential segments), not just large grid supply projects 4.
- Key Considerations: Proper segmentation ensures program diversity, higher return on investment, and resilience benefits. Investors rely on different economic models by segment, so program differentiation is needed to attract broad investment.

4. Integration with Clean Energy and EV Infrastructure
- Growth: The expansion of battery storage is seen as critical for supporting renewable energy integration, microgrids, and especially electric vehicle (EV) charging infrastructure at auto dealerships and elsewhere 5.
- Key Considerations: Utility limitations and bottlenecks in power supply can hamper EV infrastructure deployment; incentivizing battery-buffered solutions can help overcome these barriers.

5. Program Design, Incentives, and Review Processes
- Growth: The program is evolving to include multi-year review processes, annual dockets for progress assessment, and both fixed and performance-based incentives, with considerations for cost-effectiveness and alignment with emissions reduction goals 6, 7.
- Key Considerations: Incentives must balance project viability with ratepayer protection and be tied to performance metrics such as availability and emissions abatement. Regular program reviews are recommended to ensure adaptability and continued alignment with state goals.

6. Maximizing Societal and Environmental Benefits
- Growth: Storage projects are expected to provide resilience, ancillary services, emission reductions, and support for overburdened or disadvantaged communities 6.
- Key Considerations: Program design should prioritize projects that deliver these broader benefits, lower barriers for participation, and maximize long-term environmental gains.

In summary, the docket identifies significant growth opportunities in energy storage capacity, technology diversity, distributed resource deployment, integration with clean energy and EV infrastructure, improved program design, and a focus on societal benefits. Each area requires careful consideration of incentives, market segmentation, technological inclusion, and ongoing program review to achieve New Jersey’s decarbonization and resilience goals.

The stakeholders in the New Jersey Board of Public Utilities energy storage incentive program (NJ SIP) docket (Docket No. QO22080540) include a mix of energy companies, advocacy organizations, developers, and individuals. Here is a summary of the main stakeholders identified in the excerpts, with an overview of their positions where indicated:

Stakeholders:
- NineDot Energy
- Syso Technologies
- CleanCapital
- New Leaf Energy
- Vote Solar
- Advanced Energy United
- New Jersey Solar Energy Coalition (NJSEC)
- Solar Energy Industry Association
- Jupiter Power LLC
- Convergent Energy and Power
- Calibrant Energy (referenced by Convergent)
- Connecticut Green Bank (commented on related CT proceedings)
- Form Energy
- Mainspring Energy
- Arcadia (referenced in community solar context)
- Multiple NGOs/environmental groups (e.g., New Jersey League of Conservation Voters, Vote Solar, Clean Energy Group, EmpowerNJ, Delaware Riverkeeper Network, Clean Water Action, Food & Water Watch, etc.) 1
- Individuals (e.g., Michael Winka, Kirk Frost, Walter Chang) 1

Positions and Proposals:
1. Separation and Definition of Storage Segments:
- Convergent Energy and Power supports separating grid supply (front-of-the-meter, FTM) and distributed (behind-the-meter, BTM) storage into distinct programs, but advocates for further differentiation between subcategories (e.g., transmission vs. distribution grid supply, residential vs. non-residential BTM). They argue for separate targets and allocations to avoid concentration of funds and risk, and want more allocation toward distributed storage due to its additional grid benefits 2.
- NineDot Energy, Syso Technologies, CleanCapital, and New Leaf Energy argue that the current proposal does not sufficiently support FTM distribution-connected storage and provide recommendations to stimulate this segment’s growth 3.

2. Incentive Structures and Program Size:
- Several commenters noted disagreement on whether utility-owned energy storage should qualify for incentives, with some supporting inclusion and others opposing it. There is also disagreement about whether the program should start small and scale up or start large and scale back. Many support a 10–15 year contract term for fixed incentives, and want further detail on roles, responsibilities, and value stacking mechanisms. There’s also concern over rising storage costs due to supply chain issues 4.
- Convergent Energy and Power wants more certainty in the fixed incentive amounts and the right to earn performance incentives 2.

3. Performance Incentives Based on Avoided Emissions:
- Most stakeholders agree that a performance incentive based on day-ahead PJM marginal emissions signals should not be used currently due to data and implementation concerns 1, 5.

4. Technology Neutrality and Market Diversity:
- Form Energy recommends separate procurement targets and incentive structures for short-duration, long-duration, and multi-day storage, to avoid favoring one technology class over others and to align with distinct grid needs 6.
- Mainspring Energy urges that New Jersey should reward resources providing the most system benefits and flexibility, with a broader definition of eligible storage technologies 7.

5. Community Solar and Value Stacking:
- Vote Solar, in coalition with other organizations, supports policies that allow for value stacking (combining program incentives with wholesale market revenues) and emphasizes advancing the state’s clean energy goals through an equitable approach. They reiterate earlier joint recommendations for program design 5, 8.

6. Utility Scale vs. Distributed Storage:
- Jupiter Power LLC focuses on supporting policy solutions for larger utility-scale (transmission-connected) battery storage projects and claims their projects could meet 20% of the state's 2030 storage goal, but does not comment on distribution-connected project structures 9.

7. IT/OT Investments and Integration:
- Stakeholders stress the need for robust IT/OT infrastructure (like DERMS) to enable integration and efficient operation of storage assets, with clear cost recovery mechanisms for utilities 10.

In summary:
- Most stakeholders support a broader, more nuanced program structure that distinguishes between different storage technologies, project sizes, and grid connections.
- There is notable disagreement about utility ownership eligibility for incentives, program sizing strategy, and the use of emissions-based performance incentives.
- Distributed storage and value stacking generally receive broad support as program priorities.
- Technology diversity and flexible, data-driven incentive structures are favored by several stakeholders.

Key events and scheduled submissions in the New Jersey energy storage incentive proceeding include:

- June 25, 2025: Pre-qualification window opens for Tranche 1 of transmission-scale energy storage procurement. Bidders can submit prequalification information and bids from this date 1.
- July 23, 2025: Deadline for guaranteed pre-qualification review. Bidders submitting by this date will receive feedback on deficiencies and have a chance to correct them 1.
- August 13, 2025: Latest date for prequalification deficiencies to be reported to bidders for correction 1.
- August 20, 2025: Final deadline for bid submission and prequalification information for Tranche 1 procurement. No changes accepted after this date 1, 1.
- October 2025: Board decision and awards for Tranche 1 expected to be issued by the end of the month, enabling participation in the May 2026 PJM Base Residual Auction (BRA) 1, 1.
- First half of 2026: Tranche 2 solicitation planned, with exact dates to be specified in a future board order 1.
- Q3 2025: Opening of Block 1 for distributed storage program fixed incentives is anticipated 2.
- Q3 2025: Electric Distribution Companies (EDCs) expected to file performance-based incentive rates and program rules/manuals 2.
- Q4 2025: Board to approve performance-based rates and conduct a gap analysis to set the appropriate fixed incentive 2.
- Q3 2026: Block 2 of distributed storage program expected to open; EDCs to begin dispatching assets for the performance-based incentive program 2.

These milestones reflect both transmission-scale and distributed energy storage program implementation steps as scheduled in 2024–2026.

The New Jersey Energy Storage Incentive Program (SIP), docket no. QO22080540, is a regulatory initiative by the New Jersey Board of Public Utilities (BPU) aimed at accelerating the deployment of energy storage systems to support the state's clean energy and decarbonization goals. The SIP targets 2,000 MW of installed energy storage by 2030, focusing on enhancing grid resilience, reducing carbon emissions, and enabling the integration of renewable energy sources.

Key features and debates in the docket include:

- The program generally favors private ownership and operation of energy storage assets but has prompted debate over whether utilities should also be allowed to own and operate storage to help meet state goals 1 2 3.
- The SIP emphasizes performance-based incentives and the ability for storage owners to stack revenues from wholesale electricity markets and other value streams, with incentives tied to grid benefits and emissions reductions 4 2 5.
- Multiple stakeholders advocate for broadening technology eligibility (including long-duration storage) and increasing procurement targets beyond 2,000 MW to as much as 4,000 MW by 2030, to ensure reliability as renewable penetration grows 6 7.
- The program design is still evolving, with recommendations for annual reviews, transparent and competitive incentive allocations, and alignment with federal programs and PJM market rules 8 5.
- There are specific calls to support battery storage for electric vehicle charging infrastructure, grid modernization, and deployment in overburdened communities 9 5.
- Stakeholder input is being solicited on issues like interconnection, incentive caps, performance monitoring, and maximizing access to federal incentives 1 5.

Overall, the SIP docket reflects New Jersey’s commitment to rapid energy storage deployment as a foundational element of its clean energy transition, with ongoing stakeholder engagement to refine program policies and structures.