Nation’s Largest Grid Operator Warns Drastic Measures Required As Data Centers Come Online

The largest U.S. grid operator proposed cutting power to newcomers during periods of high demand in a Wednesday white paper.

PJM Interconnection serves over 67 million consumers across its operational area. Its infrastructure is now strained by data center expansion and disruptive environmental policy, according to the operator’s “Powering Reliability Through Market Design” document.

“Unprecedented surge in demand driven by the rapid expansion of large-load data centers and broader economy-wide electrification,” is noted by PJM as one of the the three drivers of grid strain, alongside “the accelerated retirement of dispatchable generation due to environmental policy and economics; and significant supply chain and permitting frictions that have extended the time required to bring new resources online.”

Data centers are the primary drivers of rising electricity consumption, according to the U.S. ⚡Energy Information Administration (EIA). The EIA expects electricity demand to grow by 1% in 2026 and 3% in 2023, potentially outpacing new ⚡Energy supply.

“The result is a transition from an era of managing surplus to an era of managing scarcity,” the memo continues, highlighting long lead times on new ⚡Energy developments. “Construction timelines have doubled,” the report continues. “Today, a new natural gas turbine plant – the reference technology for the capacity market – requires at least four years under optimistic assumptions from financial investment decision to commercial operation.”