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PJM Plans Backstop Power Amid Demand Spike
28 Jul
Summary
- Grid operator plans backstop procurement for potential shortfalls.
- Data center demand expected to rise by 70 GW by 2038.
- Recent capacity auction prices neared record highs.
PJM Interconnection, the nation's largest grid operator, is advancing plans for emergency power procurement to ensure sufficient electricity. This initiative addresses a substantial increase in demand, largely fueled by data centers. PJM serves 13 states and the District of Columbia and will submit two proposals to federal regulators.
One proposal establishes a reliability backstop procurement to counter potential power supply shortages. The second aims to create an operational tool for managing rapid load growth while maintaining system reliability during scarce supply periods. PJM expects electricity demand from new large customers, notably data centers, to climb by roughly 70 gigawatts by 2038.
In its latest annual capacity auction this month, PJM experienced power prices close to record levels, approximately $325 per megawatt-day. For the second consecutive auction, PJM did not meet its reliability requirements for projected demand. The proposed one-time backstop procurement is slated to run from September 30 to October 21, with results anticipated in early December.
