The PJM Interconnection's 2025 long-term load forecast report predicts significant growth in electricity demand over a 20-year planning horizon, PJM said.
According to the forecast, released Jan. 24, PJM expects its summer peak to climb about 70,000 MW, to 220,000 MW over the next 15 years. The record summer peak for the PJM footprint occurred in 2006 at 165,563 MW.
While winter peaks will remain slightly lower, the 2025 Long-Term Load Forecast shows winter closing the gap in peak electricity use, estimated at 210,000 MW by 2039. PJM’s record-high winter peak occurred this month, when PJM served a preliminary load of approximately 145,000 MW on the morning of Jan. 22, according to preliminary load estimates. Current generating capacity in PJM is about 183,000 MW.
“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, Operations, Planning & Security.
This year, PJM extended the forecast horizon from 15 to 20 years in keeping with the new Order 1920 long-term transmission planning rule from the Federal Energy Regulatory Commission.
The annualized growth rate over the next 20 years for the summer peak is 2.0%, compared with the 2024 Long-Term Load Forecast, which saw a comparable growth rate of 1.6% through 2039. Similarly, the 20-year annualized growth rate in the 2025 Long-Term Load Forecast for the winter peak is up to 2.4%, compared with 1.8% for the previous 15-year forecast.
PJM has warned that a capacity shortage could affect the PJM system as early as the 2026/2027 Delivery Year, which begins June 1, 2026.
Factors driving this concern include:
- The demand for electricity is growing at the fastest pace in years, primarily from the proliferation of data centers, electrification of buildings and vehicles, and manufacturing.
- Thermal generators – which provide the dispatchable generation needed to maintain reliability – are retiring at a rapid pace due to government and private sector policies as well as economics.
- New replacement resources with the needed reliability attributes aren’t being built fast enough.
To mitigate the risk of a capacity shortage, PJM's Board of Managers has directed efforts intended to bring capacity online more expeditiously and make sure price signals accurately reflect supply-demand fundamentals.
These efforts include:
Interconnection Process Reform
PJM and stakeholders have worked for several years to improve the process by which new generation gets connected to the grid, it said. Approximately 50,000 MW of projects are now through the PJM study process and clear to build. Between 2024 and 2026, PJM expects to process approximately 170,000 MW worth of generation projects, mostly renewables and storage. PJM planners and impacted transmission owners have studied about 1,200 projects since interconnection process reform was implemented in July 2023.
Reliability Resource Initiative (RRI)
The RRI is a narrowly tailored, one-time proposal filed with FERC that is designed to expedite the interconnection of a limited number of shovel-ready generating resources. A FERC decision on the PJM RRI proposal is expected in February 2025.
Surplus Interconnection Service (SIS)
PJM has filed with FERC a proposal to streamline existing SIS Tariff provisions to allow new generators that do not trigger transmission system upgrades to use an existing generator’s unused interconnection capability without having to go through the generation interconnection process. A FERC decision on proposed changes to SIS is expected in February 2025.
Capacity Market Adjustments
PJM has filed with FERC a handful of modest reforms that reflect system realities to ensure the market continues to represent supply-demand fundamentals, risk and resource performance, and evolves as the system evolves.
The auction date for the 2026/2027 Delivery Year was moved from December 2024 to mid-2025 to provide time for FERC approval and subsequent adjustments to proposed market rule changes.
PJM’s filings seek to maintain the model resource used to help set prices in the capacity market, better reflecting current economic realities of developing new generation. PJM also proposed to acknowledge the contribution of Reliability Must-Run resources in the capacity market, where appropriate, to better reflect the system’s available supply.
Capacity Interconnection Rights (CIR) Transfer Reforms
PJM will soon file with FERC a reform package endorsed by stakeholders designed to facilitate an expedited interconnection process for a replacement resource seeking to use the CIRs of a deactivating resource.
PJM annually solicits information from its member electric distribution companies (EDCs) for large load shifts (either positive or negative) that are known to the EDCs but may be unknown to PJM. PJM reviews the requests, gauging their significance and risk of double-counting; for example, is the trend likely to have been captured in the economic forecast?
For the 2025 Long-Term Load Forecast, these include:
- Data centers (AEP, APS, ATSI, BGE, ComEd, Dayton, PECO, PL, PS, Dominion)
- Industrial (AEP)
- Electric-vehicle battery manufacturing (COMED)
- Steel facility (Duke)
- Electrification of New Jersey ports of Bayonne, Elizabeth and Newark (PS)
The Long-Term Forecast Process
The report includes long-term forecasts of peak loads, net energy, load management, distributed solar generation, plug-in electric vehicles (EVs) and battery storage for each PJM zone, region, locational deliverability area and the total RTO.
The long-term forecast is for planning purposes and is separate from the daily and weekly forecasts performed by PJM Operations to prepare for daily load changes.
The PJM long-term load forecast is constructed using 24 hourly models for each transmission zone. In each model, load is the dependent variable, considered alongside weather, calendar events, economic data and end-use variables.
In the history, PJM starts with metered load and then reconstitutes total load with load-management addbacks, load drops associated with peak-shaving programs, and distributed solar generation estimates.
The report "presents an independent load forecast prepared by PJM staff. The load forecast process considers residential, commercial and industrial sectors, each with its own set of models and inputs, including input variables for end-use saturation and efficiency as well as for economic drivers."
Insights from this process, combined with data on historical weather, are the starting point for determining peak and energy forecasts.
PJM staff then makes adjustments based on forecast growth in behind-the-meter solar generation, battery storage and plug-in EVs, and also considers information from electric distribution companies on non-modeled trends, such as data centers. The forecast also took into account a New Jersey Order on Electrification.