New Jersey BPU Launches First Phase of Garden State Energy Storage Program to Boost Renewable Energy Integration

NJBPU Approves Garden State Energy Storage Program Phase 1

The New Jersey Board of Public Utilities (BPU) has officially approved Phase 1 of the Garden State Energy Storage Program (GSESP) after engaging stakeholders for two years. The rules pertaining to the GSESP will also be published in a future edition of the New Jersey Register.

Phase 1 marks the initiation of a multi-phase incentive program aimed at developing 2,000 megawatts (MW) of energy storage by 2030, as mandated by the Clean Energy Act of 2018 (P.L. 2018, c.17). This program represents a significant advancement in New Jersey’s energy strategy, facilitating the integration of intermittent renewable energy sources and providing a crucial opportunity for energy storage developers to obtain long-term, fixed-price incentives.

Phase 1 specifically targets transmission-scale, front-of-the-meter energy storage systems, with incentives for distributed storage expected to be included in Phase 2, anticipated in 2026.

### Key Takeaways for Developers

1. **PJM-Ready Requirement**: Eligible projects must:
– Be transmission-connected to the PJM bulk power system and located within a New Jersey transmission zone.
– Have PJM interconnection approval or capacity interconnection rights (CIRs) from a deactivating facility.
– Commit to a commercial operation date (COD) within 30 months after the application period closes, with an additional 150-day grace period.
– Complete construction and interconnection to the PJM transmission network by the COD.

2. **Site Control and Permitting**: Developers must demonstrate readiness to secure all necessary approvals. Projects that involve brownfield redevelopment, provide community benefits, and possess strong environmental attributes may receive preferential treatment over lower bid levels.

### Details of Phase 1: Transmission-Scale Storage Solicitation

To align with the pending New Jersey Assembly Bill A-5267, which mandates the BPU to establish an energy storage procurement and incentive program, Phase 1 incentives will be limited to transmission-scale energy storage systems directly linked to the bulk transmission system. Both standalone storage and storage additions to existing solar resources (including solar-plus-storage and other Class I renewable energy resources) are eligible, as long as they are not already receiving incentives from the Competitive Solar Program.

Despite calls for greater utility involvement and ownership of energy storage systems, Phase 1 incentives are restricted to private (non-EDC) and governmental entities.

Additional components of Phase 1 include:
– Final awards will determine which projects are eligible and the size of each project’s incentive.
– Payments will be disbursed annually over a 15-year term.
– A “pay-as-bid” model will allow developers to propose a fixed annual incentive for their energy storage capacity, with funding awarded to projects offering the lowest cost per MW to promote cost-effectiveness.
– The initial solicitation (“Tranche 1”) aims to procure between 350–750 MW, with a total Phase 1 goal of 1,000 MW of transmission-scale storage.

The prequalification review for Phase 1 applications will open on June 25, 2025, with a guaranteed review deadline of July 23, 2025. Final bids must be submitted by August 20, 2025, with award announcements expected in October 2025.

### Looking Ahead: Phase 2 Distributed Storage in 2026

Developers with behind-the-meter or distribution-level assets should prepare for Phase 2 in 2026. Anticipated features for this phase include distributed fixed incentives based on capacity, performance incentives likely tied to grid services or dispatch, involvement from distributed energy resource aggregators, and prioritization of projects that benefit underrepresented communities or enhance distribution system resilience.