Back in 2022, Manu Asthana arrived at the annual meeting of the Organization of PJM States with a message he has repeated frequently since then.
Electricity demand was projected to grow like it had not in decades, generators were retiring at an accelerating rate, and their replacements were not being built at near the pace required to keep up with those trends. Potential risks to the reliability of the electric grid for 65 million people were increasing by the end of the decade, he said, as he urged state regulators, industry executives and elected officials to come together to solve the problem.
“We have time,” PJM’s President and CEO said back then. “But we don’t have time to waste.”
This week, Asthana returned to OPSI’s Annual Meeting in Columbus, Ohio, to report on the very real advances PJM and its stakeholders had achieved since then to maintain existing generation and bring more online. That includes landmark interconnection reform, implemented in July 2023, that streamlined the process for new generators to plug into the grid, and market rule changes that better value the contribution of each generation resource to the reliability of the system when the grid needs it most. It also included significant education conducted for state and federal policymakers around these system needs.
Despite those accomplishments, however, Asthana told the gathering of state and industry officials Monday, he is more worried than ever about having enough electricity supply to serve electricity demand, or load, that is forecast to grow by leaps and bounds.
“I feel more concerned today than I did two years ago about resource adequacy,” he said Monday. “Load is growing much faster than we had projected then, which even back then was an eye-popping set of numbers.”
PJM’s recent capacity auction, in which PJM secures commitments from generators to provide electricity in the future, produced higher than usual prices. Those prices have thus far served their purpose of incentivizing some generators to delay retirement and others to consider investments in new generation.
But the unprecedented load growth, led by the country’s drive to win the global artificial intelligence race with the development of energy-hungry data centers, is not abating.
“I haven’t seen any forecast of load that allows me to rest and say we’re good,” he said Monday. “We need capacity – a lot of capacity.”
Asthana said that PJM continues to work with stakeholders to try and enable the efficient addition of generation capacity. Those efforts revolve around:
- Capacity Interconnection Rights – Ongoing stakeholder efforts to more efficiently build generation on the site of retired generators
- Reliability Resource Initiative – PJM’s proposal to allow additional generation resources onto the system quickly through a one-time window
- Surplus Interconnection: Trying to make use of interconnection capability that is available when existing resources are not generating
But load promises to grow at increasing rates, policies continue to pressure retirement of existing thermal generation, building of flexible gas generators has slowed in the current environment, and permitting and supply chain issues continue to hamper the construction of renewable projects, he said.
“We don’t have a ton of time – this load is coming upon us rapidly,” Asthana said. “We’re talking about our way of life and our dominance as a global superpower. So we take this obligation to serve this load that is coming in very seriously.”
PJM is considering some targeted enhancements to its markets, which have saved consumers billions of dollars while attracting new development to keep the lights on, he said. “There are things we can tweak to make them better, and we are thinking about that,” he said. “I think that process of improvement is one that’s collaborative. We need to do this together.”