PJM Interconnection, which covers a fifth of Americans as the biggest U.S. grid operator, said this week that it will file plans with federal regulators to close a widening gap between electricity supplies on its system and demand overwhelmingly brought by data centers.
The grid operator serving 13 U.S. states in the Mid-Atlantic and Midwest plans to file two proposals with the Federal Energy Regulatory Commission, to secure more power and manage surging demand on the grid, PJM said late on Monday.
Backstop procurement plan for unmet data center needs
One of those plans establishes a “reliability backstop procurement” process that is aimed at matching supplies with data center power needs that have not been met with long-term contracting. The one-time backstop procurement would begin on September 30 and run through October 21, with results released in December, PJM said.
PJM has been seeking ways to bring more generation online to meet rapidly growing electricity demand brought largely by the expansion of data centers in the region. It expects demand from new very large energy customers to rise by about 70 gigawatts by 2038.
One gigawatt, for reference, can power about 750,000 homes.
The purpose of the backstop procurement process would be to cover supply shortfalls in PJM's most recent power auctions.
At its annual capacity auction this month, power prices hit a price cap at $325 per megawatt-day. Despite the high prices that are meant to incentivize the construction of new power plants, PJM fell short by about 6.8 gigawatts of its reliability requirement to meet projected demand — a steeper shortfall than what resulted from the previous auction — which raises the risk of blackouts on the grid.
Data center registry and possible curtailment in emergencies
The second proposal the PJM Board of Managers directed staff to file with FERC would create a registry for data centers, and other very large energy users, that would track the location and electricity use of those operations.
For the data centers that do not supply their own power, PJM proposes that it can temporarily shut off electricity to the sites in periods of extreme stress on the grid to avoid rolling blackouts. It does not, however, have the ability to curtail that electricity and would require the cooperation of individual state governments, PJM said.
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