PJM Interconnection, the US’s largest regional grid operator, has won federal approval to fast-track the review process of up to 50 new power generation projects. These projects will supplement power supply in 13 states as energy demand increases due to data center growth.
According to the Federal Energy Regulatory Commission (FERC), the grid operator, which manages grid services in states across the southern and eastern US, will review a host of projects to reduce the potential for power generation shortages at the end of the decade.
The 50 schemes are likely to include several large gas generation projects. In the spring, they will join the batch review of 55GW of legacy projects, which include renewable and battery energy storage.
The decision follows an announcement last year that there were “significant adequacy concerns” across PJM's network due to the growth in demand from large data centers. “PJM is in grave danger of not having enough generation to meet demand,” FERC commissioners David Rosner and Willie Phillips said in a statement.
PJM expects significant growth in energy demand over the next two decades. In its 2025 Long-Term Load Forecast Report, published last month, PJM warned that a capacity shortage could affect the PJM system as early as 2026/27. The report cited the proliferation of data centers as the primary factor in this load growth across the majority of its member electric distribution companies.
“This forecast captures the dramatic increases in future energy demand, as evidenced by the last two years when data center development has grown exponentially,” said Aftab Khan, executive vice president for operations, planning, and security at PJM.
In a recent report from Grid Strategies, the PJM coverage area was pinpointed alongside the Ercot region, which covers Texas, as the areas of the US expected to see the largest increase in load growth over the next five years. PJM utilities recently increased their estimates for large-scale load additions by 2029, from 15GW to 30GW, with most growth concentrated in Northern Virginia, the world's largest data center market.
Natural gas generation is increasingly being viewed as the only energy source that can meet the skyrocketing demand for data centers across the US. According to a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA), utilities and gas pipeline companies in southeastern US states are planning to build more than 20GW of new natural gas power plants by 2040.
Data center demand is the major driver, especially in Virginia, South Carolina, and Georgia. The report found that data centers are responsible for between 65 percent and more than 85 percent of projected growth in these states.
