2023 Long-Term Load Forecast Predicts Growth Fueled by Data Centers

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PJM’s long-term load forecast predicts estimated load growth of 0.8% per year for summer peaks, 1% for winter peaks and 1.4% for net energy over a 10-year planning horizon starting in 2023.

Rising energy demand by data centers, mostly in Virginia and Maryland, is a chief driver of this increased energy use.

The PJM Load Forecast Report, released Dec. 29, was derived using improved modeling techniques, as described in the 2023 Load Forecast Supplement.

In a key change, PJM used monthly, instead of annual, data to model residential, commercial and industrial sectors.

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 (LDA), 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.

In a second key change, PJM switched from a daily to an hourly forecast model, contracting with Itron to help in the transition. Weather data from 1993 to 2021 informed this analysis, which better captures weather-sensitive resources such as wind and solar.

Ever-changing weather is a key driver of energy demand. And increasing amounts of renewables may also influence generation.

PJM’s forecast model does not currently take into account climate change, but PJM has plans to evaluate both warming trends as well as the frequency and magnitude of extreme weather events in winter and summer.

Data Centers, EVs, Solar Drive Trends

The forecasts of the following zones were adjusted to account for large, unanticipated load changes, market adjustments and peak shaving adjustments:

  • The forecasts for areas representing AEP, the former Allegheny Power System (made up of a group of FirstEnergy utilities) and Dominion were adjusted to account for growth in data center load.
  • The East Kentucky Power Cooperative forecast was adjusted to account for a peak-shaving program to begin with the 2023 Delivery Year.
  • The forecasts for areas representing AEP, the former Allegheny Power Systems and PPL were adjusted to account for non-retail, behind-the-meter generation transitioning to participate as demand response in the capacity market.

In analysis customized to 21 geographic transmission zones within PJM, the increasing popularity of EVs is also anticipated to add demand. For example, PJM estimated that an estimated 500,000 electric, light duty passenger vehicles in its region will climb to 4.5 to 5 million RTO-wide by 2038. PJM considered state EV targets and Energy Information Administration growth estimates for states without EV growth policy in place.

Factors subtracting from load growth include growing energy efficiency and behind-the-meter solar installations.

Summer Peak Estimates

The forecast estimates summer peak load growth to average 0.8% per year over the next 10 to 15 years. This estimated rate is expected to result in an RTO-wide summer peak of approximately 160,971 MW in 2033 and 167,567 MW in 2038.

The 2023 summer’s upcoming peak is forecast at approximately 149,059 MW. PJM’s record summer peak took place in 2006 at 165,563 MW.

Winter Peak Estimates

PJM’s record-high winter peak measured 143,129 MW in February 2015. PJM estimated a winter peak of approximately 130,812 MW for winter 2022/2023. On Dec. 23, 2022, as Winter Storm Elliott moved through the region, PJM recorded a preliminary peak load of 135,296 MW. The 90th percentile (or once every ten years) load forecast for winter 2022/2023 was 140,696 MW. In 10 years, annual 1% growth contributes to the projected 2032/2033 winter peak of approximately 144,992 MW, continuing through 2037/2038 to approximately 150,555 MW.

YearSummer PeakWinter PeakPJM RTO Total Energy
2023149,059 MW130,812 MW788,050 GWh
2033160,971 MW144,992 MW909,622 GWh
2038167,567 MW150,555 MW960,428 GWh

The Long-Term Forecast Process

This 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.

Comparison to 2022 Load Forecast

Compared with last year’s long-term forecast, the 2023 estimate trims the summer peak forecast by approximately 293 MW (or -0.2%).

The forecast estimate for the 2026 summer peak (the usual three-year-ahead capacity market auction year) increased by 473 MW (or 0.3%).

By the summer peak of 2028, the next study year of the Regional Transmission Expansion Plan, the long-term forecast increased by 2%, or about 3,015 MW.

The total amount of energy consumed annually, or net energy, is expected to grow at an annual rate of 1.4% over the next 10 years and 1.3% over the next 15 years. This estimate represents an increase from the 0.8% annual growth estimated in last year’s 15-year forecast for 2022–2037.