PJM's Power Grid Strained by Data Center Boom
The PJM Interconnection, the largest power grid in the U.S., is grappling with a surge in power demand from data centers. A recent long-term load forecast by PJM shows a peak load growth of 32,000 MW from 2024 to 2030, nearly all from data centers. This growth is driven by tech companies operating data centers, leading to an 82 percent increase in PJM's July capacity auction, totaling $7.2 billion.
PJM is exploring measures to manage this increased demand. One proposal is a 'bring-your-own-generation' requirement, where data center developers install their own power supplies at new facilities. Additionally, PJM is considering asking utilities to check if proposed data center projects in the region are duplicates in other grid regions to prevent 'double counting'.
Monitoring Analytics estimates that data centers will add nearly 12,000 MW to the expected peak power demand in the PJM region next summer. The Natural Resources Defense Council projects that consumers could see an increase of up to $163 billion in utility bills through 2033 due to data center power demand. The Union of Concerned Scientists found that data center projects have led to $4.3 billion in transmission expansion costs passed on to consumers in seven PJM states. Moreover, over $16 billion in payments to power companies is passed on to utility customers in the 13-state PJM region due to data center load additions.
Northern Virginia's 'Data Center Alley', located within the PJM territory, significantly contributes to this increased power demand.
The rapid growth of data centers in the PJM region is posing challenges to the power grid and consumers' wallets. PJM is taking steps to manage this increased demand, but the long-term impact on consumers and the grid remains to be seen.
