NJ’s Electricity Needs

With US electricity demand set to reach record heights, New Jersey looks to chart its energy future.

By Jim Pytell, Managing Editor On Jan 31, 2025

Over the next five years, US electricity demand is expected to grow by almost 16%, according to the consulting firm Grid Strategies. To put that into perspective, power consumption has increased less than 1% annually over the past 20 years.

This tremendous increase in demand is driven by a number of factors including AI-driven database expansion, broad-based electrification, and increased domestic manufacturing.

Such a significant increase in electricity demand will undoubtedly put pressure on existing power grids, necessitating substantial investments in transmission infrastructure.

“If we don’t address this, we’re going to end up with brownouts, blackouts, we’re going to cut back on energy usage in certain cases and at peak times, and costs (for electricity) will go through the roof,” says Christie 55 Solutions General Manager Bob Martin, who adds that the electricity demand in the US could more than double between now and 2050.

At NJBIA’s 4th Annual Energy Conference this past fall, Martin (who was former commissioner of the New Jersey Department of Environmental Protection during the Christie administration) said that the US electric grid is not prepared for significant load growth and, more importantly, has not kept up with the increase of solar and wind power.

Further, facing the biggest load growth challenge is the PJM grid, which New Jersey and 12 other states are a part of.

According to Martin, electric demand for PJM is projected to increase 68% by 2050, compared to 57% in all other grid regions in the nation.

“I would argue those numbers are still on the low end at the end of the day, so we’ve got our challenges in front of us,” he says.

Complicating matters, Martin pointed out that the PJM footprint is home to Data Center Alley in Loudoun County, Virginia, the largest concentration of data centers in the world.

AI Driven Data Centers

A December 2024 report from the U.S. Department of Energy found that nationally, data center load growth has tripled over the past decade and is now projected to double (or potentially even triple) by 2028. New Jersey appears to be no exception to that trend as Gov. Phil Murphy has been clear in his aim to foster and build a strong AI industry and AI-related infrastructure in the state.
“Data centers brought on by current and projected use of AI technologies are a big part of energy consumption upswings,” Martin says.

He cites a report from the Enterprise Power Research Institute (EPRI) that projects data centers will grow to consume 4.6% to 9.1% of US electricity generation annually by 2030, versus an estimated 4% today.

PSE&G, New Jersey’s largest energy company, is currently working with more than 70 data centers in the state.

“We are working with many more as they explore developing in New Jersey,” Dave Johnson, senior vice president, chief customer experience officer, PSE&G tells New Jersey Business Magazine. “PSEG is also in the unique position of being able to serve the power needs of hyperscale data centers via our three-unit nuclear generating units in South Jersey that deliver reliable, 24/7, carbon-free power.”

PSEG is the parent company of PSE&G and PSEG Nuclear. The company’s nuclear facilities provide 85% of New Jersey’s carbon-free energy generation and approximately 40% of New Jersey’s energy.

Electric Vehicles

PSE&G says that as electric vehicle adoption grows in New Jersey, the company is proactively incorporating anticipated EV load growth into its capital planning process to maintain grid reliability.
“Through the Infrastructure Advancement Program (IAP), we are modernizing the grid to support increased charging demands and enhance reliability at the neighborhood level,” Johnson says. “And over the past 15 years, PSE&G has made significant investments in our transmission infrastructure, leaving us well positioned to serve the growing demand for vehicle and other electrification growth in our territory. With the electrification of medium- and heavy-duty vehicles anticipated to accelerate, we continue to assess and invest in necessary grid improvements.”

Of note, the Murphy administration-backed mandate to require that new gas-powered cars can’t be sold in the state by the year 2035 has essentially been lifted via an executive order (EO) issued by President Trump .

“The EO basically ordered the EPA to take action to eliminate the mandates,” says NJBIA Deputy Chief Government Affairs Officer Ray Cantor. “But how you got into the mandate will determine how you get out. There are two options under the Clean Air Act for engines – one is to adopt EPA’s federal standard, the other is to adopt the California standard, which New Jersey has done. EPA would need to revoke the waiver to get rid of the California requirement. To get rid of the EPA standard, EPA would need to change the regulations.”

Renewable Energy

Martin says that renewables will be a critical part of the US energy portfolio, and the U.S. Energy Information Administration projects that wind and solar energy will account for 44% of electricity generated by 2050.

“This has strong support,” Martin says. “But you can’t necessarily look at it as a 1-for-1 replacement. You can’t replace 1 megawatt of baseload, combined cycle plant energy with 1 megawatt of renewable energy. And that’s okay. But we’ve got to make sure we plan (for more renewable energy sources), permit it and build it.”

On offshore wind, Paulina O’Connor, executive director of the New Jersey Offshore Wind Alliance (NJOWA) says that by adding supply to the capacity market (PJM) through technology like offshore wind, demand can be brought closer to supply which contributes to lower prices.

“New Jersey imports its power from other states because we do not make enough,” O’Connor says. “Another reason why offshore wind is a great solution to the problem is that it allows us to become wholly energy independent.”

Of course, the Trump administration has been critical of offshore wind, which has led to uncertainty about the industry’s future in New Jersey, but O’Connor is hopeful that the value proposition of wind energy will be recognized.

“Offshore wind continued under President Trump’s first term in office and we hope to see the same this time around,” O’Connor says. “We want to promote and establish America’s energy independence and security. We are creating US jobs, we support and want to develop US manufacturing and the supply chain, we are revitalizing the shipbuilding industry and are investing in port infrastructure.”

These are all things that O’Connor says establishes the country’s dominance and strengthens its economy, and, in turn, appear to align with things that President Trump values.

Referencing an Offshore Wind-related EO from the Trump administration, Cantor stressed concern that “the pause in offshore wind leasing and other changes being made, could harm our nascent industry still trying to get off the ground.”

“There might be resistance to offshore wind, but at the end of the day, it would diversify our energy portfolio and result in job creation and help boost our economy,” Cantor says.

Conclusion

“Overall, it’s safe to say we applaud these measures for bringing balance to our energy policies, but time will tell how effective they are,” Cantor says of the Trump administration EOs. “Further actions, such as the adoption of regulations, will need to be taken to effectuate the orders and there will be legal challenges.

“We also should remember that New Jersey also has its own legal authorities to take certain actions, so it is unclear how it will ultimately play out. But New Jersey, for its part, needs rational policies that will keep our energy affordable, abundant and reliable. We look forward to working with the Trump administration, the Murphy administration and the next governor, to ensure our energy policies are effective and affordable.”

Separately, Martin adds that there will also need to be significant private investment to help avoid an electric energy crisis.

“The private sector needs to play a role in investing in this overall energy plan and addressing all these issues,” he says. “Just relying on Washington is not the answer at the end of the day.”

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