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Writer's pictureYoann Hispa

The Challenges and Opportunities of New Jersey’s Electric Grid Capacity

Updated: 2 days ago


The Challenges and Opportunities of New Jersey’s Electric Grid Capacity


New Jersey’s electric grid is under increasing strain, and it’s sparking critical conversations about the state’s energy future. With rising energy demands driven by scorching summer heatwaves, ambitious electrification goals, and economic growth, ensuring the reliability and efficiency of the electric grid is key—not just for residents, but for energy developers eyeing long-term opportunities.


Recent hearings and data shed light on the state’s grid challenges, advances in renewable energy projects, and the path forward to meet growing demands.


Understanding New Jersey’s Current Grid Capacity


New Jersey’s electricity grid and capacity faces mounting pressure due to extreme weather events, surging energy consumption, and the push toward electrification. According to recent reporting, this summer’s record heat led to a 20% spike in energy consumption for Atlantic City Electric customers. Heating, ventilation, and air conditioning systems worked overtime, substantially increasing strain on the grid and driving electricity bills up 44% compared to the prior year.


Adding to these challenges, the state's electricity supply is tightening. PJM Interconnection, the regional transmission organization supplying New Jersey, reported that auction bids came in nine times higher this year, signaling rising costs and a constrained supply. With projections of increased peak loads, grid reliability becomes an even more pressing issue as demand continues to rise across industries, residential areas, and public infrastructure.



Challenges Facing the Grid


Several factors highlight the need for urgent upgrades and deliberate planning for New Jersey’s grid:


  1. Extreme Weather Resilience: Frequent heatwaves, driven by climate change, are pushing grid infrastructure to its limits. Prolonged periods of high temperatures mean 24/7 operation of air conditioning units and increased energy use, compounding stress on the aging infrastructure.

  2. Electrification Goals: Governor Phil Murphy’s clean energy agenda emphasizes mass electrification, yet these initiatives demand significant grid upgrades to support widespread adoption of electric vehicles (EVs), heat pumps, and other technologies. Without these upgrades, the current infrastructure may falter under the weight of additional loads.

  3. Infrastructure Aging & Maintenance Costs: Much of New Jersey's grid infrastructure requires upgrades to handle not only immediate energy surges but also projected long-term demand. Recent rate hikes reflect investments directed toward modernizing grid systems, as utilities aim to improve reliability.

  4. Rising Costs for Consumers: Rate increases have created financial strain for both residents and businesses. This raises questions about balancing affordability with funding the infrastructure investments required for a modernized grid.



New Jersey’s Renewable Energy Push


Amid these grid challenges, progress on renewable energy projects in New Jersey holds promising potential to increase supply and promote sustainability.


  1. Offshore Wind Expansion:

    New Jersey is doubling down on offshore wind energy, including landmark projects such as the development of the Ocean Wind 1 and Ocean Wind 2 arrays. These projects are expected to produce over 2,300 megawatts of clean power, supporting the state's ambitious goal of generating 50% renewable energy by 2030.

  2. Solar Energy Growth:

    New Jersey ranks among the top states for solar energy adoption, with over 150,000 residential and commercial solar installations. This push supports grid stability through distributed energy resources (DERs) and reduces dependence on centralized power plants.

  3. Community Solar Initiatives:

    Innovative community solar programs allow residents and businesses to subscribe to shared solar farms, expanding accessibility to clean energy options while reducing costs for subscribers.


These projects not only reduce greenhouse gas emissions but provide opportunities for enhanced grid resilience. Renewable installations can diversify the energy supply mix, helping to buffer against shortages or price shocks caused by traditional fuel market volatility.



Planning for the Future of New Jersey Grid Capacity


While challenges remain, solutions are on the horizon to ensure New Jersey’s grid evolves to meet the demands of the 21st century.


  1. Grid Modernization Investments:

Utilities are allocating significant resources toward upgrading transmission and distribution systems. For instance, Atlantic City Electric attributed part of its recent rate hike to infrastructure updates designed to improve reliability during peak demand periods.


  1. Demand Response Programs:

    Encouraging customers to shift electricity use to off-peak hours can alleviate pressure on the grid. Programs offering financial incentives for managed usage are becoming more common and effective tools for balancing load.

  2. Energy Storage Deployment:

    Battery storage systems can smooth out fluctuations in energy supply and demand, providing critical back-up power and enhancing the integration of intermittent renewable resources like wind and solar.

  3. Federal and State Collaboration:

    New Jersey's participation in a coalition of states under the PJM service area offers opportunities to leverage joint market and regulatory frameworks. Petitions to the Federal Energy Regulatory Commission (FERC) to reintegrate certain electricity plants into the supply chain could boost market capacity and stabilize regional grid operations.

  4. Public-Private Partnerships:

    Collaboration between energy developers and state agencies is essential to ensure smarter investments in energy infrastructure. Incentive programs for grid reinforcement, renewable project development, and technology innovation remain pivotal in addressing systemic challenges.



Why Energy Developers Should Pay Attention


For energy developers, New Jersey’s grid scenario presents both challenges and significant opportunities. The state’s ambitious renewable energy targets, along with its push for electrification and decarbonization, open the door for innovative technologies, investments in infrastructure resilience, and public-private partnerships.


Supporting grid-enhancing technologies such as microgrids, energy storage, and advanced metering infrastructure (AMI) could position developers as key players in modernizing New Jersey’s electric network. Furthermore, renewable project participation aligned with state policy initiatives can unlock incentives while contributing to grid stability.


Energy developers who align their strategies with New Jersey’s evolving grid needs and clean energy goals will not only address key challenges but also play a critical role in building a more sustainable, efficient future.


Looking Toward the Future with Grid Capacity Tools



New Jersey Grid Capacity


When developing energy projects, understanding grid infrastructure and measuring offtake capacity and transfer capacity is crucial for selecting optimal project locations. For energy developers operating in areas like New Jersey, LandGate offers a comprehensive solution to streamline this process.


LandGate's platform provides complete electric grid mapping, giving you a detailed and transparent view of grid infrastructure in targeted regions. With data on available power at every substation, you'll gain valuable insights into offtake capacity, enabling you to make informed decisions about site viability and project feasibility.


By leveraging LandGate's advanced tools, energy developers can minimize guesswork, reduce project lead times, and strategize effectively to align with grid availability. Whether you're working on solar, wind, or storage projects, having access to robust grid data helps ensure your project's success from the outset.


Click here to book a demo with our dedicated energy markets team.




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