New Jersey faces energy crisis amid data center expansion and climate concerns

The New Jersey Senate Environment and Energy Committee convened on March 17, 2025, to address the growing concerns surrounding the rapid expansion of data centers in the state. As demand for these facilities surges, so too does the pressure on New Jersey's electric grid, raising alarms about potential environmental impacts and energy affordability for residents.

During the meeting, advocates from environmental organizations, including the Sierra Club, emphasized that the unchecked growth of data centers could undermine New Jersey's clean energy goals. They highlighted the experience of Virginia, which has seen a proliferation of data centers leading to increased fossil fuel reliance, air and water quality degradation, and rising electricity costs. The Sierra Club urged the committee to implement regulations that would require data centers to utilize clean energy sources and adopt energy-efficient practices to mitigate their environmental footprint.

Conversely, representatives from the New Jersey Chamber of Commerce and the New Jersey Business and Industry Association expressed concerns that stringent regulations could deter data center investments in the state. They argued for a diversified energy portfolio that includes natural gas as a viable option for powering these facilities, cautioning against limiting energy sources to renewables and nuclear power alone. They stressed the importance of attracting AI companies and data centers to New Jersey, suggesting that excessive regulatory hurdles could push these businesses to seek more favorable conditions elsewhere.

The committee also discussed the implications of the current energy market, particularly the PJM grid, which has been criticized for its slow interconnection processes and reliance on aging fossil fuel plants. Advocates called for a modernization of the grid to accommodate new clean energy projects and ensure reliable power supply for the growing demand from data centers.

As the meeting concluded, the committee members were left to weigh the competing interests of environmental sustainability and economic growth. The discussions underscored the urgent need for a balanced approach that addresses the energy demands of data centers while safeguarding New Jersey's environmental integrity and ensuring affordable electricity for its residents. The outcomes of this meeting could shape the future of energy policy in New Jersey, as the state navigates the challenges posed by the intersection of technology and environmental stewardship.