At today’s fourth annual NJBIA Energy Policy Conference at Delta Hotels Woodbridge, some of the top energy executives in New Jersey discussed what a successful energy transition would look like in the Garden State.
Simply put, the “energy transition” is the process of shifting the world’s energy system away from fossil fuels and toward renewable energy sources.
“There is a very diverse group of stakeholders [here today],” said Amy Cradic, senior vice president & chief operating officer of non-utility businesses, strategy and external affairs, New Jersey Resources. “I think that is very reflective of the complexity of the energy transition. There is no single voice and no single solution to get us to our decarbonization goals.”
Cradic said that a diversification strategy is key when it comes to moving forward with such a transition.
“We need energy systems [in this case gas and electric] that work together because that helps bring reliability to where you need it to be, while also empowering affordability,” she added. “The energy transition won’t happen at scale unless it is affordable for families and businesses. It also won’t happen if you can’t meet the basic expectations of the public as energy providers to keep the lights on, homes warm, and businesses running.”
The impetus of the transition toward renewable energy in New Jersey is the state’s Energy Master Plan, which outlines strategies to reach the Murphy administration’s goal of 100% clean energy by 2050.
“When the Energy Master Plan came out, there was a sharp move away from natural gas as a part of the energy future. This was a key strategic inflection point,” said Michael Renna, president & chief executive officer, South Jersey Industries Inc. (SJI). “We got out in front of it and made it a point to find our place in the energy transition. We redefined who we were as a company. We no longer considered ourselves a natural gas utility, but instead began to shift the conversation to infrastructure.”
Renna said he believes that because of SJI’s infrastructure modernization efforts, the company is well positioned to be an accelerator of the energy transition.
However, he did add that there is still significant demand for natural gas in New Jersey.
“Natural gas is affordable and abundant. It is about three to three and a half times less expensive than electricity right now. Additionally, much of the infrastructure required for electrification doesn’t yet exist. The electric grid is not designed for full electrification,” Renna said.
According to New Jersey Resources, energy demand is increasing for the first time in a decade, with the US on track to set new power demand records in 2024 and 2025.
This demand growth – in part – is driven by AI-related data center buildout and electric vehicles.
“The continued evolution of AI and demand for AI data centers is going to have a tremendous economic impact for New Jersey,” added Phil Vavala, region president, Atlantic City Electric and Delmarva Power. “But without necessary changes, the state and the region are going to continue to be challenged to provide sufficient power – not only to meet new development needs – but also to meet the needs of existing customers.”
“500 MW can power a town or small city – or a single AI data center,” said Zeeshan Sheikh, senior vice president, chief information and digital officer (CIDO) for PSEG Services Corp. “The amount of data we are generating and the amount of new data that we are going to create takes a ton of power.”
Overall, when it comes to charting a smart path forward toward our energy future, reliability must remain a North Star.
“We need to focus on our reliability efforts as we meet our decarbonization goals,” Cradic said. “You really have to pay attention to [reliability]. It shouldn’t distract from our goals, but it should make us careful.”
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