PJM Resumes Interconnection Studies: Natural Gas Leads New Power Queue Amid Renewable Slowdown

America’s largest electricity market, PJM Interconnection, has resumed evaluating new power generation projects after a two-year hiatus. The shift comes as the organization addresses a massive backlog of interconnection requests that had stalled renewable energy development.

PJM halted new evaluations in 2022 when its interconnection study queue swelled to 2,664 projects, including 1,972 renewable projects totaling 107 gigawatts—about two-thirds of the total backlog. Jon Gordon, senior director at Advanced Energy United, noted that PJM has spent the past four years processing this backlog. “They’ve been spending these past four years working through the backlog, studying everything that’s in there, and that process is up,” Gordon said.

New Interconnection Queue: 220 Gigawatts Submitted

Last August, PJM announced a reformed interconnection process and opened the first cycle for new applications. Projects were due this week, and PJM confirmed on Wednesday that 811 projects with a combined capacity of 220 gigawatts were submitted by the Monday deadline.

The composition of these projects differs significantly from the previous backlog. While solar, storage, and hybrid solar-storage projects account for more than half of the queue by project count (536 total), natural gas dominates by capacity. Nearly half of the total 220 gigawatts—106 gigawatts—is attributed to natural gas projects.

Renewable Energy Faces Delays and Rising Costs

Renewable energy advocates had long pushed for interconnection queue reform at PJM, citing delays that stretched up to eight years. Even as solar costs declined, inflation and higher interest rates following the COVID-19 pandemic and Russia’s invasion of Ukraine increased development expenses. The situation worsened when Donald Trump re-entered the White House and launched a campaign against clean energy initiatives.

PJM reported in a March blog post that since 2020, 103 gigawatts of interconnection agreements resulted in only 23 gigawatts of new generation being added to the grid. Shockingly, three-quarters of projects studied by PJM withdrew from the process before delivering power.

Reformed Process Aims to Accelerate Project Approvals

To address these challenges, PJM implemented a new “first-ready, first-served” approach, replacing the previous “first-come, first-served” model that had caused bottlenecks. The organization states this reform will prioritize projects that are more advanced and better positioned to proceed.

“The reformed queue couldn’t come soon enough,” Gordon emphasized. Over the past four years, PJM has faced urgent demand for additional power, driven largely by the explosive growth of data centers and the need to stabilize high electricity prices.

Electricity Prices and Capacity Shortfalls

Since 2020, electricity prices in PJM have surged nearly 50%, rising from 12.6 cents per kilowatt-hour to 18.7 cents per kilowatt-hour, according to data from Heatmap and MIT’s Electricity Price Hub. Typical monthly electricity bills have increased from around $128 to about $161.

PJM warned last month of a potential capacity shortfall of 50 to 60 gigawatts over the next decade, primarily due to rapid load growth. For context, one gigawatt is sufficient to power a city of approximately 800,000 homes. PJM’s current installed capacity stands at around 180 gigawatts.

When asked about the significant role of natural gas in the new queue, Gordon declined to provide further comment.