PJM’s market monitor says the explosion of data center load is now the primary reason capacity prices have spiked. (Utility Dive)
In the latest auction, data centers added $7.3B in costs—pushing revenues up 82% to $16.1B. Across the last two auctions, data center demand made up about half of PJM’s $30.8B in capacity payments.
Capacity auctions are supposed to ensure PJM has enough generation in reserve, but the monitor warned the unprecedented pace and uncertainty of data center growth is distorting the market. Clearing prices are being set based on projections that could prove wildly off.
Fixes are on the table: The monitor wants new data centers to bring their own generation, while PJM is drafting new rules to tighten load forecasts and add financial requirements for hyperscalers, with a FERC filing due before year’s end.