"The largest power grid in the United States" PJM: The U.S. faces a significant power shortage in the next decade, with a gap of up to 60GW

The largest power grid operator in the United States, PJM Interconnection, has warned that the grid may face a power supply gap of up to 60 gigawatts over the next decade, equivalent to the generating capacity of about 60 large nuclear reactors. This forecast significantly exceeds the 6.5 gigawatt gap observed by the agency in its most recent capacity auction last December, as the rapid expansion of data centers is significantly driving up power demand.

According to Bloomberg, the agency noted in a meeting on Friday that there is currently a lack of sufficient generating units or other resources to meet the annual peak load and reserve requirements starting in mid-2027, which means that the grid's backup capacity is insufficient and the risk of power outages is accumulating. PJM provides power services to nearly one-fifth of the U.S. population.

Meanwhile, the Trump administration is pushing for PJM to hold an emergency wholesale power auction later this year, aimed at addressing rising residential electricity costs and supporting the continued development of data centers.

Unprecedented Scale of Supply Gap

Rebecca Carroll, Executive Director of Market Design at PJM, stated during the meeting that filling the 60 gigawatt power supply gap is expected to require an investment of about $180 billion, far exceeding the previously estimated $15 billion in past auctions, highlighting the severity of the investment gap in power infrastructure.

As the first in a series of workshops over the coming weeks, PJM is systematically assessing how to effectively procure the long-term supply resources needed to ensure grid reliability. During the meeting, a representative from a power developer inquired whether the agency is considering changing the current model of signing contracts through auctions on a 12-month cycle to a forward procurement model for large-scale supply needs over the next decade.

Given the increasingly severe power shortages faced by the grid in regular auctions, Carroll responded:

“PJM is open to discussions on this. It is something everyone should be thinking about.”

AI-Driven Energy Landscape Transformation

The massive power consumption of artificial intelligence data centers has already changed the global energy landscape. The grid is at the center of this transformation, ensuring that tech companies receive sufficient power while also facing greater pressure from extreme weather and limited supply.

PJM is expected to submit a plan to federal regulators in May and hold this special procurement event in September according to the White House's timeline. This schedule aligns with the emergency auction plan promoted by the Trump administration.

The challenges faced by this grid operator reflect the urgency of U.S. power infrastructure in responding to the demands of emerging technologies. The rapid expansion of data centers not only tests the existing grid's capacity but also raises new requirements for long-term power planning and investment.

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