New Jersey faces an unprecedented growth in electricity demand—and an increasingly urgent challenge to keep power reliable and affordable. Unless demand is reduced or new resources are developed beyond what regional grid operator PJM has projected, a serious reliability shortfall could occur by 2031, with possible shortages or rolling blackouts possible as soon as next summer 2027.
As electricity demand grows, New Jersey faces an important question: Should the state invest billions in new natural gas infrastructure, or prioritize cleaner, more cost-effective ways to meet its energy needs?
That question was at the center of The All-of-the-Above Trap: Natural Gas Won’t Lower Your Bill—Clean Energy Will, a webinar hosted by the New Jersey League of Conservation Voters (LCV) on October 14, with ReThink Energy NJ and the Sierra Club New Jersey Chapter as cosponsors.
The traditional “all-of-the-above” energy strategy aims to meet demand by supporting a mix of energy sources, including fossil fuels and renewables. But continuing to fund natural gas infrastructure alongside clean energy can lock ratepayers into costly fossil fuel investments instead of accelerating the transition to cleaner, more affordable alternatives.
Patty Cronheim, Program Director of ReThink Energy NJ, highlighted the need to look beyond building more methane power plants and consider how reducing peak demand and expanding clean energy can help keep electricity reliable and affordable.
Reliability Starts With Managing Demand
Growing electricity demand does not automatically mean New Jersey needs more methane gas plants. Before committing ratepayers to costly new infrastructure, the state should examine how much demand can be reduced or shifted through energy efficiency, battery storage, and other flexible resources.
These solutions can ease pressure on the grid during periods of peak demand, when electricity is often most expensive and the system faces its greatest strain. Pairing demand reduction with additional renewable energy can help meet electricity needs while reducing reliance on costly fossil fuel generation.
Virtual power plants (VPPs), which coordinate resources such as batteries and flexible electricity use, offer another way to balance the grid without relying solely on new power plants.
Managing Peak Demand Can Help Lower Electricity Costs
One of the keys to making electricity more affordable is understanding how wholesale electricity prices are set. As electricity demand increases, more expensive power plants—often the dirtiest methane gas-fired “peaker” plants—are brought online to meet the grid’s needs. Because the most expensive generation required to meet demand sets the market price, gas-fired power can drive up electricity costs even when lower-cost resources are also generating electricity.
This is why meeting New Jersey’s growing energy needs requires more than building additional power plants. Reducing peak demand can limit the need to rely on expensive generation when electricity use is highest. Energy efficiency, battery storage, and flexible electricity use can ease pressure on the grid, while bringing more affordable renewable energy online can reduce reliance on fossil fuels and lower costs.
As data centers and other large energy users drive demand higher, New Jersey must ensure that households and small businesses are not left paying the costs of infrastructure built to serve large new customers.
Additionally, while recent policies address future data centers supplying their own energy, they fall short in requiring this energy to be clean. This creates the potential for data centers to be powered by more dirty fossil fuels – polluting our air, water, and putting our climate at risk.
A Smarter Path to a Reliable Grid
New Jersey can address growing electricity demand without defaulting to more methane gas. Rather than continuing to fund fossil fuel infrastructure under an “all-of-the-above” approach, the state can prioritize clean energy, demand reduction, storage, and grid modernization to meet growing needs while limiting unnecessary costs for ratepayers.
Before committing to new fossil fuel infrastructure, state leaders and regulators should fully evaluate solutions that reduce peak demand and make better use of cleaner resources.
The bottom line: A reliable, affordable energy future requires more than adding new power plants. By reducing peak demand and prioritizing clean energy, New Jersey can meet its electricity needs without locking ratepayers into costly fossil fuel investments.
Watch the full webinar recording to learn more →
