PJM Sees Major Power Shortfall Over Next Decade Amid Data Center Boom
(Bloomberg) -- PJM Interconnection LLC, operator of the largest US grid, warned of a potential power supply shortfall of as much as 60 gigawatts over the next decade as data centers accelerate demand growth.
The shortfall will come if unprecedented action isn’t taken to support the construction of new power plants, according to PJM executives who spoke at a meeting on Friday.
The 60-gigawatt figure compares with a 6.5-gigawatt shortfall that was seen during PJM’s most-recent auction held in December. A gigawatt is roughly the output of one large nuclear reactor, or enough to serve about 800,000 homes.
PJM is warning that there isn’t currently enough generators or other supplies to meet peak demand plus required reserves for the year starting mid-2027, according to comments at the grid meeting. This gap means the grid doesn’t have enough spare capacity to protect against blackouts. PJM serves nearly a fifth of Americans.
Massive electricity consumption from the data centers that run artificial intelligence has transformed the global energy landscape. Power grids are at the epicenter of the shift, working to ensure technology companies have enough electricity while also facing more pressure from extreme weather and limited supplies.
Friday’s PJM meeting was the first in a series of workshops scheduled over the coming weeks as the grid operator works to figure out how procure supplies needed to ensure reliability.
Meanwhile, the Trump administration is urging PJM to hold an emergency wholesale electricity auction later this year as a way to combat higher consumer utility bills while also aiding the development of data centers.
Solving for that 60-gigawatt shortfall would cost closer to $180 billion, not the $15 billion that was estimated was needed to solve for the last auction’s shortfall, Rebecca Carroll, executive director of market design at PJM, said in the meeting.
During the meeting, a representative for a power developer asked Carroll if PJM was willing to consider that much volume and exposure to procuring supplies for the next 10 years, versus the current method of contracting for supplies on 12-month periods through auctions.
“PJM is open to having the discussion,” Carroll said. With the grid facing increasing shortages in its regular auction, it’s “something that everybody should be thinking about.”
The grid operator expects to file a plan to federal regulators in May and to hold this special procurement event in September, in line with the White House’s timeline.
©2026 Bloomberg L.P.
