world
PJM Proposes Cutting Power to Data Centers During Peak Demand
PJM Interconnection, which serves over 67 million consumers, released a white paper on May 6 warning of an unprecedented surge in electricity demand from data centers and electrification. The operator outlined three potential market design changes to manage the shift from surplus to scarcity, including measures that would curtail power to new large loads first.
DA
finance.yahoo.comAudio version
Tap play to generate a narrated version.
Developing·Limited corroboration so far. This page will refresh as more sources emerge.
The largest U.S. grid operator proposed cutting power to newcomers during periods of high demand in a May 6 white paper. PJM Interconnection serves over 67 million consumers across its operational area. Its infrastructure is now strained by data center expansion and the accelerated retirement of dispatchable generation due to environmental policy and economics, according to the operator’s “Powering Reliability Through Market Design” document.
An unprecedented surge in demand driven by the rapid expansion of large-load data centers and broader economy-wide electrification is one of three drivers of grid strain. The others are the accelerated retirement of dispatchable generation and significant supply chain and permitting frictions that have extended the time required to bring new resources online.
Data centers are the primary drivers of rising electricity consumption, according to the U.S. Energy Information Administration. The EIA expects electricity demand to grow by 1% in 2026, potentially outpacing new energy supply.
The result is a transition from an era of managing surplus to an era of managing scarcity, the white paper states. Construction timelines have doubled, with a new natural gas turbine plant now requiring at least four years under optimistic assumptions from financial investment decision to commercial operation.
The average environmental review takes over four years to complete. Permitting requirements contribute considerably to long development times, the document notes.
The white paper highlights three paths toward keeping the grid solvent. Path A aims to stabilize markets through long-term forward commitments either through mandatory Load Serving Entity hedging requirements or through a PJM-administered, long-term procurement, such as a tiered, multiyear capacity market.
