PJM has finally greenlit a lot of new clean power. Can it get built?

The country’s biggest energy market has a problem: It can’t build enough power plants to keep up with electricity demand.

For PJM Interconnection’s 67 million customers across 13 states, the consequences are ever-higher utility bills. For PJM itself, it’s unrelenting political pressure, from blue-state lawmakers on up to President Donald Trump.

Familiar culprits are at the heart of the issue. PJM’s interconnection queue is snarled and slow. Its capacity market prices are through the roof. And, yes, power-hungry data centers are driving demand to heights that even a well-functioning system might struggle to meet.

The situation has spurred many proposed solutions, including Trump’s prescription that PJM should simply ​“build big power plants again,” specifically, coal, gas, and nuclear. State lawmakers have, for their part, focused on trying to limit the development of increasingly unpopular data centers.

But these plans miss what could actually make a near-term difference: building the more than 50 gigawatts of projects that have, at long last, secured the right to connect to PJM’s grid. Last year, PJM finally completed interconnection reviews for a ​“cluster” of projects seeking permission to connect to its grid. Some projects had been awaiting word since 2018.

Any projects that haven’t yet secured these kinds of interconnection rights are going to have to wait years more for PJM to determine whether they can be plugged into the grid. That makes the power plants that have already won interconnection agreements the only options to be “ deployed fast enough to do something before 2030,” said Nikhil Kumar, a program director for GridLab, an energy analysis nonprofit. ​“Everything beyond that is speculative, both on the load front and on the generation front.”

And now that these projects are finally approved for interconnection to PJM’s grid, it’s up to states and their utilities to actually get steel in the ground. 

“State governors need to force their utilities to help get more generation online,” Kumar said. ​“There’s no two ways about it.”

Although natural gas power plants dominate new interconnection-queue applications and emergency fast-track applications in PJM, the vast majority of projects with approvals in hand are solar, wind, and batteries, per data from think tank RMI. 

These new clean energy projects could help rein in costs. A May report from Aurora Energy Research commissioned by RMI found that adding 5 GW of solar and 5 GW of wind in PJM by 2028 could save utility ratepayers a combined $10.9 billion over a decade.

But an interconnection agreement is no guarantee. Before a developer can get to work, utilities have to complete the necessary grid upgrades. States and localities have to issue permits. Developers also need to secure financing — a task that’s made much easier if they can sign contracts to sell their power.

Projects can drop out at any point in this process. In fact, 41% of U.S. projects that signed interconnection agreements from 2000 to 2022 eventually withdrew, according to 2025 data from Lawrence Berkeley National Laboratory.

These issues are beyond the grid operator’s control. Once PJM has issued interconnection agreements and identified necessary grid upgrades, those projects ​“are done with our process and are free to connect,” said PJM spokesperson Jeff Shields. ​“We would love to see all those projects get built, but we don’t have the authority to make it happen.”

Getting grid upgrades built on time

Once a developer gets an interconnection agreement, they’re on to the next step: paying for the grid upgrades their project requires.

Even though these upgrades are particularly expensive in PJM, cost is not the only hurdle at this stage. There’s also the matter of getting utilities to actually make upgrades in a timely manner.

That’s according to David Mindham, senior director of regulatory and market development at EDP Renewables North America, one of the country’s largest clean energy developers.

Utilities must build local ​“spur lines” and substations to bring new power plants online. Almost all projects also trigger more investments deeper into the high-voltage transmission system. And in Mindham’s experience, ​“utilities want several years to build simple network upgrades.”

Indeed, interconnection upgrades by utilities in PJM were far more likely to be delayed past their scheduled completion date than other types of grid projects, according to an analysis of PJM project construction data shared with Canary Media by Halcyon, a startup that uses AI to analyze utility and energy datasets.

Why the delays? Abraham Silverman, an energy researcher at Johns Hopkins University who co-authored a 2024 report on PJM’s interconnection challenges, had an explanation: Utilities ​“don’t prioritize network upgrades because they don’t get to roll them into rates.”

Utilities earn regulated profits on their capital investments. In the PJM region, utilities have focused the lion’s share of grid spending on projects that undergo relatively little regulatory oversight, like upgrading existing lines, in order to maximize those profits. Given the choice, utilities are likely to prioritize scarce grid equipment for moneymaking projects, not those that developers are paying for, Silverman said.

State policymakers and regulators could take on these delays. A 2025 analysis from RMI and the National Caucus of Environmental Legislators proposed several policy interventions, such as requiring utilities to share data on network-upgrade timelines and holding regulatory hearings to justify lags.

But deadlines won’t speed things up unless utilities face consequences for blowing them, GridLab’s Kumar said. ​“The only way you change this scenario is to have the governors tell the utilities to get these solar and battery projects online,” he said. ​“There should be penalties, or some strict deadlines, on meeting certain milestones. Simply requesting it is not going to work.”

Streamlining permitting

States have another big lever to pull: They can streamline environmental reviews, state and local siting requirements, zoning and land-use approvals, and other processes that fall under the broad term of ​“permitting reform.”

It’s a messy subject. Local opposition to clean energy projects is rising in rural areas where solar and wind tends to be built, and any state efforts to push projects through could trigger drawn-out legal challenges.

States in PJM territory, including Illinois and Virginia, are starting to push pro–clean energy permitting policies, but that work has been slow going.

“States have made a lot of noise about improving state and local permitting, but we are still waiting to see the output,” said John Miller, a managing director and energy transition policy analyst at investment bank TD Cowen. Meanwhile, other PJM states — namely Ohio — are doing the opposite, and making it harder for clean energy projects to get permitted.

Yearslong interconnection wait times have also taken their toll. Many of the developers Silverman interviewed for his 2024 PJM interconnection report ​“effectively suspended all permitting and siting work and all equipment procurement work because they simply didn’t know when it was going to come out of the queue,” he said. ​“In the meantime, there was a pandemic, there was inflation, and the economics radically changed for a lot of these projects.”

Even so, he said, ​“I think we’re seeing an increased interest in working with state and local siting and permitting issues,” particularly with data center developers willing to spend enormous sums of money to get the power they need.

Energy developers agree. ​“If the new hyperscalers can sign contracts for new generation, a lot of the pieces will fall into place,” said Glen Thomas, president of the PJM Power Providers Group, a trade organization representing major power project developers.

Bring your own capacity for data centers: Batteries or gas? 

States may soon have another potent tool to advance the construction of these greenlit power plants — forcing data centers to contract with the project owners.

PJM’s most pressing problem is its need to secure adequate capacity to meet peaks in power demand. Capacity market prices have spiked more than eightfold over the past several years to reach a record high of $16.4 billion in its past two auctions, driving up utility rates in many PJM states.

Consumer advocates, state lawmakers, and PJM’s independent market monitor blame proposed data centers for these capacity pressures. Their preferred solution is to force power-hungry new data centers to either pay for their own capacity resources or have their grid power cut off during grid emergencies.

A July proposal from PJM would put utilities and their state regulators in charge of implementing that policy. Some PJM states — namely Pennsylvania — are already moving on this front.

Data centers could try to secure their own capacity by contracting with projects that haven’t yet won interconnection rights. They could even stake their futures on the highly speculative gas power plants being promised by the Trump administration.

But PJM’s proposed capacity regime sets a 2032 deadline for securing resources. Projects that haven’t already secured interconnection agreements by now or early next year will have a hard time getting online by then, said Julia Hoos, head of USA East at Aurora Energy Research, an analysis firm that covers PJM issues.

And while there are just under 5 GW of gas-fired power plants in that category, PJM also has roughly an equivalent amount of batteries that could be ready to deploy, she said. 

Solar and wind are unlikely to be the chief targets here, as they don’t count much toward capacity needs given their intermittency. Batteries, however, are a stronger fit, said Tom Rutigliano, senior advocate for climate and energy at the Natural Resources Defense Council. But they’ll face some stiff competition from gas plants.

Batteries with a typical four-hour duration are roughly equivalent in cost to more-efficient gas-fired combined cycle power plants, and a better deal than less-efficient combustion turbines, according to analysis from Aurora Energy Research. But gas plants have been the favored choice for data center developers in the region so far — largely because they’re a tried-and-true workhorse of the U.S. generation fleet.

Though gas plants have some reliability problems during winter cold snaps, they can produce round-the-clock power, meaning they count for more in PJM’s capacity market than batteries do, Rutigliano noted.

But batteries have a major ​“time to power” advantage over gas plants. The manufacturing backlogs for gas turbines and fierce competition for engineering and construction firms to build gas plants are pushing timelines for completing them into the five to seven years range. Battery projects can be brought online much sooner.

“We hear you can build storage about two years faster than gas,” Rutigliano said — and with data center demand at a fever pitch, ​“being available two years earlier makes a big difference.” That puts pressure on data centers, which are willing to ​“throw enough money at [batteries] to get them built,” and on states ​“to get rid of any other nonfinancial barriers.”

Unlike California and Texas, which have both built tens of gigawatts of grid batteries, PJM has barely built any, Silverman added. That leaves lot of room to expand PJM’s capacity for storing energy generated by lower-cost solar and wind power for use at times of grid stress, particularly if states can goose the market with energy storage mandates, as is happening in New Jersey and Illinois.

Connecting to cheap, fast, and ready-to-go clean energy

Capacity isn’t PJM’s only problem. Booming demand for power is also driving up the energy prices that utilities and wholesale power purchasers pay to get the electricity they need from one hour to the next across the region, which adds more upward pressure on utility rates. And right now, the only near-term source of new energy to relieve that pressure is the energy that’s cleared PJM’s interconnection queues, Silverman said.

That brings us back to the same elephants in the room: the tech giants behind the data center boom.

Amazon, Google, Meta, Microsoft, and a handful of other major tech companies have been the biggest financiers of solar and wind projects for more than a decade, even as their overall emissions have ballooned given their exploding electricity consumption.

The projects these companies could target are distributed across PJM’s territory, encompassing all or part of 13 states and Washington, D.C. States that can move them ahead quickly could see jobs and economic benefits as well as lower power prices. 

These tech companies may be compelled to make up for their climate backsliding by seeking out clean energy in PJM. They could also be enticed by the opportunity to lock in lower-cost electricity — wind, solar, and storage remain the cheapest form of new generation capacity available in the U.S.

Or states may push them to go green. In Illinois, lawmakers are debating a ​“bring your own new clean energy” requirement for data centers. Other states are taking similar, if distinct, paths to pushing data centers to secure clean energy. Pennsylvania’s new data center plan sets some carbon-free energy requirements, albeit relatively low ones. And New Jersey is encouraging data centers to pay for home energy efficiency, batteries, and rooftop solar to counterbalance their impact on the grid.

None of these state actions on their own can solve all PJM’s problems. But with public opposition to data centers surging, now might be the time for these tech companies to focus on building the clean energy projects that have made it through PJM’s queue — and for states to hold their feet to the fire to make it happen.

“We have to ask the question: Are they serious about their climate commitments?” Silverman said. ​“I’d like to think they are — but we need to see some results.”