PJM Interconnection’s latest capacity auction generated $16.1 billion in revenue, an $7.3 billion increase (82%) from the previous auction, mainly driven by data center demand, according to a report by Monitoring Analytics.
Over the last two auctions, data centers accounted for $16.6 billion—50% of the $30.8 billion total revenue.
This situation leads to some key issues:
- Uncertainty in data center load forecasts challenges auction reliability.
- A price cap (2024 agreement) has led to a reduction of costs by $3.2 billion (20%) in the last auction.
- $4.4 billion were approved in 2024 in transmission upgrades for data centers, with similar costs expected in 2025.
PJM is currently proposing new rules, including state reviews of load forecasts and financial guarantees for large customers, to address volatility.