PJM Interconnection, the grid operator managing the power market and regional transmission planning for all or parts of 13 states in the Mid-Atlantic and Southeast, has once again doubled its annual load growth forecasts, citing “large, unanticipated” changes caused largely by the influx of data centers.
PJM forecasts summer peak load growth within the RTO to average 1.7% per year over the next 10 years, more than double the .8% annual increase forecasted in last year’s 10-year outlook. Winter peak load is projected to grow 2% annually for the next decade, which also doubled.
Net energy load growth within the region is projected to average 2.4% annually over that period, according to PJM’s 2024 Load Report, an increase of 1% from the forecast issued in Jan. 2023. Total PJM energy is forecasted to be 1,033,267 GWh in 2034, a 10-year increase of 219,939 GWh.
PJM experienced a similar doubling of its 10-year load forecast from 2022 to 2023 when summer peak load growth jumped from projected growth of 0.4% per year to 0.8%. New data centers were to blame then, too.
According to Grid Strategies, U.S. peak demand growth could grow by more than 38 GW through 2028, driven by the development of data centers and industrial and manufacturing facilities.
The report, The Era of Flat Power Demand is Over, cited forecasts from grid planners, who have doubled the five-year load growth forecast over the past year. The nationwide forecast of electricity demand jumped from 2.6% to 4.7% growth over the next five years, according to FERC filings – and these forecasts are likely an underestimate, Grid Strategies said. Recent updates have tacked on several GW to that forecast, and next year’s will likely show an even steeper growth rate.
Perhaps unsurprisingly, Grid Strategies says our power grid is not yet ready for such significant growth. The U.S. installed 1,700 miles of new high-voltage transmission miles per year on average in the first half of the 2010’s but dropped to only 645 miles per year on average in the second half of the decade. Low transfer capability between regions is a key risk for reliability if load growth outpaces deployment of new generation in some regions, the report added.
Transmission investments will ultimately need to increase to keep up with demand, but investor-owned utility investment in transmission serving new load has actually decreased over the past three years, according to data from Edison Electric Institute. In 2021, expansion-related transmission capital expenditures were forecast at $9.2 billion but declined to $8.8 billion for 2023.
