GLASSBORO, N.J. — Facing a projected 40% hike in regional electricity demand by 2030, New Jersey needs to rapidly craft a plan on how to boost generation and develop its transmission and distribution system, according to speakers at a Feb. 27 conference on the state’s energy future.

Power demand from data centers and artificial intelligence projects, along with the expected increase in electric vehicle use and building electrification, are driving demand forecasts that project a power shortfall without significant action, industry stakeholders and state officials said at Meeting New Jersey’s Energy Needs, held at and hosted by Rowan University’s Steve Sweeney Center for Public Policy.

The most visible sign of the shortfall was the Basic Generation Service auction held by the New Jersey Board of Public Utilities in February, which will trigger a hike of about 20% in the average residential bill in June.

“It’s a supply-and-demand issue … We need more electrons on the grid,” BPU President Christine Guhl-Sadovy told the conference of about 150 energy executives, government officials and other stakeholders. She added that it is “unrealistic to think that this kind of price shock can be absorbed by ratepayers without impact.”

Yet it is not clear in the current, uncertain political and energy environments where the additional supply to New Jersey, an energy importer, will come from, speakers said. The stalling of the state’s offshore wind projects, and the lack of clarity over the future economics of solar and other forms of renewable energy generation in the face of opposition to subsidies from the Trump administration, could upend the state’s expected reliance on those sources, speakers said. (See NJ Abandons 4th OSW Solicitation.)

“All these trends are evident in New Jersey,” former state Sen. Bob Gordon, a former BPU commissioner, said as he introduced a panel of generation company executives. “And we’re starting to see some real impacts of the supply-demand imbalance.”

The disruptions are unfolding amid ongoing warnings by PJM that aging fossil fuel plants are going offline at a faster rate than replacement plants are arriving, and the RTO is struggling to maintain a generation balance.

“The supply-demand crunch has come to us quickly,” said Asim Haque, senior vice president for PJM, who underscored the urgency of the situation by noting that the RTO saw its highest ever winter peak demand this year on Jan. 20, Martin Luther King Jr. Day.

In assessing how to boost generation, states need to understand that different generators have different “capabilities of how they can contribute to reliability on the system,” he said.

The suddenly oncoming demand suggests the state should move cautiously in its rush toward electrification, said Michael J. Renna, CEO of South Jersey Industries, which owns several natural gas distribution utilities in the state.

New Jersey’s heating-fueled winter peak is three times as high as the air-conditioning-driven summer peak, and “the grid, including all the way down to the utility levels, is built for the summer peak,” Renna said.

“You rush to electrification, you’ve got big problems, because neither the grid nor the utility systems are capable of moving that much electricity, let alone the fact that we have a generation cap,” he said.

He suggested the state instead focus on decarbonization by using gas with lower carbon content that can be used on existing infrastructure, such as “renewable natural gas or green hydrogen that can safely be blended with the geologic natural gas.”

Tim Sullivan, CEO of the New Jersey Economic Development Authority, which funded much of the state’s offshore wind initiatives, said he continues to believe that the economic and employment benefits of wind generation, and the escalating pressure to add supply sources, will return wind to the fore.

“We are not giving up on wind,” he said. “One of the reasons I’m confident in that is that we actually are seeing, outside of Jersey, progress in offshore wind projects. You’ve got electrons that are flowing in Virginia, New York and Massachusetts that are hitting their grids.

“It’s very hard to disabuse me of the notion that the best way forward for New Jersey” is to address the supply-demand imbalance with offshore wind, he said.

Nor is the state going to shy from the energy challenge presented by the demands of AI projects, Sullivan said.

“AI across the country, across the globe, is going to be an energy monster,” he said. He acknowledged that AI projects need “hundreds of megawatts to a gigawatt of power, and they need hundreds of acres of space,” both of which are limited in New Jersey.

Nevertheless, Gov. Phil Murphy is “smartly positioning the state to be a leader, not a follower, in AI,” Sullivan said. He noted that the state recently launched a program that will award $500 million in tax credits to support AI infrastructure and cited the example of a $1.2 billion state-of-the-art data center planned by CoreWeave. The company signed a lease in October on 280,000 square feet of space at the former global headquarters of pharmaceutical giant Merck in North Jersey.

Harnessing Existing Infrastructure

Hanging over any solution that helps boost generation is how to overcome the challenging task of connecting a project to the state’s transmission and distribution system, speakers said. That includes the well known delays with PJM’s generator interconnection queues.

In addition, all of the state’s four utilities, to varying degrees, have areas where projects cannot be connected because the infrastructure cannot accept them, said Lyle Rawlings, president of the Mid-Atlantic Solar & Storage Industries Association (MSSIA).

“That’s the big bad problem that we’re facing. It’s already putting tremendous downward pressure on our ability to deliver solar in this state,” he said.

The issue was a major factor in the drop in installed solar capacity in 2024, he said. BPU figures show installations were 40% below the 2023 level even as the state reached a milestone of 5 GW of installed projects.

Still, Rawlings said, the state is “on track” to reach its goal of 17 GW of installed solar power by 2035, and MSSIA modeling shows that by then it could account for 24.5% of New Jersey’s electricity, with nuclear contributing 34%. (See Struggling NJ Solar Sector Evaluates Net-metering Reform.)

Former Commissioner Gordon suggested that part of supply could be swiftly increased by connecting grid-scale battery storage through the infrastructure left behind by now closed generating facilities.

“The task of getting the PJM approval for a battery storage facility located at an old fossil fuel generating plant could take much less time than a brand new project,” he said. “I mean, maybe 90% of the analysis has already been done, and you’re not likely to encounter the political pushback from building something new in an area that might affect the neighbors, because people been living with this generating plant for decades.”

PJM’s Haque said the RTO is awaiting the result of an application to FERC to grant approval in such a situation. He said PJM also has sought permission to grant accelerated approval to projects that pair a generating facility that already has been approved with a battery storage project.

“It’s about trying to expedite resources,” he said. So an approved solar project could be paired with storage, enabling the batteries to “produce during periods where that solar unit can’t produce” and without forcing the storage operator to “go through the queue.”

Leveraging the Footprint

A similar strategy of harnessing “surplus interconnection opportunity” could be adopted by upgrading the state’s existing solar projects, said Lawrence Barth, director of corporate strategy at NJR Clean Energy Ventures, an energy project developer and operator.

“We ought to be thinking about how do we leverage that footprint now that we’ve got panels that produce two to three times that amount than when they were originally installed, at lower cost,” he said.

Several speakers suggested the state consider boosting generation by adding to the nuclear fleet in South Jersey, the Salem 1 and 2 plants and Hope Creek, which are operated by Public Service Enterprise Group and generate about 40% of the state’s electricity. They cited the example of Plant Vogtle — one of the first nuclear reactors built in the U.S. in nearly a decade — that came online in Atlanta in 2024.

But they also noted the extensive permitting bureaucracy, massive investment and lengthy construction timeline needed; Vogtle took 15 years to build. More feasible would be a small nuclear reactor, which could be built in five or six years, said Erick Ford, president of the New Jersey Energy Coalition.

“If they’re going to start the process now, [by] 2030 they should be able to have it online,” he said.