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The PJM Interconnection will hold a one-time reliability backstop auction for new capacity from Sept. 30 to Oct. 21 to fill a 6.8-GW shortfall from the grid operator’s last base capacity auction, under a proposal filed at the Federal Energy Regulatory Commission on Friday.
In PJM’s last capacity auction, for the delivery year that starts in mid-2028, the grid operator failed to secure enough capacity to meet its 20% reserve margin target, a level of capacity that aims to ensure that PJM has no more than one unexpected power outage every 10 years.
The shortfall was largely driven by growing data center load forecasts and a lack of matching new power supplies. PJM estimates that data center and other large load demand could grow by up to 70 GW by 2038.
In PJM’s two-part plan, the grid operator is also facilitating a process for data centers and power suppliers to reach bilateral deals. The backstop auction’s capacity target could be reduced if bilateral contracts are reached before the auction.
