Facing an expected surge in energy demand, New Jersey’s Board of Public Utilities outlined a draft Energy Master Plan (EMP) on March 13 that would continue the state’s existing, vigorous electrification strategy while also accepting “emerging clean firm technologies,” such as nuclear power.
The 2024 EMP, which the BPU began researching last year, succeeds the 2019 version, which formed the cornerstone of Gov. Phil Murphy’s aggressive renewable energy strategy. It included the aggressive promotion of offshore wind and solar generation, electric vehicle adoption with incentives, and building electrification.
The new plan predicts a 66% increase in electricity demand by 2050 if the state pursues its existing policies, driven by the power needs of new data centers, building electrification and the shift from fossil fuel-powered vehicles to EVs.
What impact the latest master plan will have is unclear, however. Murphy is serving his last year in office, and the vigorous opposition to renewable energy in the current White House may limit some of the state’s efforts.
The draft plan contains few concrete policy decisions pending further stakeholder input. It concludes that the state’s clean energy goals can be achieved through a “rapid and sustained pace of low-carbon technology deployment.”
Eric Miller, executive director of the governor’s Office of Climate Action and the Green Economy, said the draft plan offers an “actionable and flexible approach to achieving our clean energy future that’s grounded in the best data available.”
Among the findings is that the state should adopt a short-term and vigorous pursuit of “no regret” climate actions, such as building and transport electrification, utility-scale solar, and battery storage deployment, the BPU said in its presentation.
Miller said a “no regrets” policy is one that “we know provides significant benefits to the climate and the state’s ratepayers without material downsides.” Such policies are central to all of the three future energy path scenarios outlined in the plan, he said.
Mitigation Strategies
The EMP is part of the state’s effort to reach 100% clean electricity by 2035 and an 80% reduction in gas emissions by 2050.
It was compiled by Energy + Environmental Economics (E3) through research, modeling and stakeholder input from four public hearings in spring 2024. (See NJ Master Plan Speakers Seek Sweeping Electrification Plan.)
E3 looked at four “Climate Pathways Scenarios” with varying levels of emission reductions, including current policy, which it said would not meet the state’s goals.
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- current policy: 50% renewable portfolio standard; 5 GW of offshore wind would be developed; slow adoption of heat pumps; 25% cut in building gas use by 2050; and EV adoption driven by Advanced Clean Cars and Advanced Clean Trucks programs.
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- high electrification: 100% clean energy standard by 2035; rapid heat pump adoption; 80% cut in building gas use by 2050; 94% of vehicles are EVs by 2050; and industrial gas use is reduced by 50% by 2050.
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- demand management: 100% clean energy standard by 2035; 60% of existing homes and commercial buildings have “envelop upgrades,” or exterior wall insulation installed; 5 GW of new solar added by 2050; widespread managed EV charging to reduce peak load; and reduction in vehicle miles traveled through urban design and public transit.
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- hybrid electrification: 100% clean energy standard by 2035; 40% of homes have a heat pump and a backup gas system; 94% of vehicles are EVs, but 20% are plug-in hybrids; and advanced renewable fuels are blended with fossil gas and petroleum to mitigate a portion of non-electrified fuel use.
A spokesperson from Murphy’s office said all three of the mitigation scenarios enable the state to reach its goals. The final report will contain “a preferred scenario, but it will not be presented as the only scenario for the future,” they said.
E3 said the high electrification scenario has the greatest impact on the grid, while the other two are designed to mitigate the stress on the grid using peak demand reduction. Electricity demand is expected to grow by more than 90% by 2050 in all three scenarios, with the biggest increase — 109% — experienced under high electrification.
Meeting demand would require growth in nuclear power, according to E3’s presentation. There also would be a “role” for “emerging clean firm technologies” such as long-duration storage, and generators fueled by hydrogen or renewable natural gas, it said.
The mitigation strategies also would rely heavily on rebates to make the new clean technology accessible, the BPU said. That would be especially so in the adoption of heat pumps, which cost about $20,000 to install, compared to $5,000 for a fossil-fuel boiler, the agency said.
But by 2035, the average energy bill for electrified households and those powered by fossil fuels will be “comparable,” E3 said. For example, the average monthly energy bill, including vehicle fuel, would range from $325 to $360 in 2025, depending on whether the household was all electric or uses some gas. And by 2035, the range would be from $385 to $419, the BPU said.
Support and Opposition
The BPU presented the plan during a three-hour online public hearing that drew varying reactions from 40 speakers.
Patty Cronheim, a clean energy advocacy consultant, said she fully supported the high electrification scenario, in part because she has renovated her 100-year-old home to be a “complete electrification building.”
“I understand firsthand how building electrification can help with the decarbonization transition by relieving peak summer demand,” she said. She urged the BPU to make sure that data centers are “on the hook for clean electricity generation that benefits the public and not be a strain on a system that costs New Jerseyans.”
David Pringle, a steering committee member of environmental group Empower NJ, said his “main testimony today is going to be skepticism.”
He said the Murphy administration “hasn’t come close” to implementing all the air emissions and “adaption rules” laid out in the 2019 EMP, and even if it implemented the 2024 rules, the next administration could have its own plans.
While BPU and E3 officials stressed that affordability and the cost to ratepayers is a key element in the state deciding its energy strategy, Andrew Kuntz, staff attorney with the New Jersey Division of Rate Counsel, expressed concern that there was little evidence so far to support that claim.
“The current version of the 2024 EMP is devoid of any mention of a rate impact study,” he said. “Affordability matters, and it must be part of this process.”
Ray Cantor, a lobbyist for the New Jersey Business & Industry Association, said the plan has “a wrong starting point” in focusing on electrification.
“We need to rely on what we know works, and primarily at this point in time, we need more natural gas generation,” he said.