Equinor bets on PJM gas and storage as off-peak demand outpaces peak load growth
PJM wholesale costs are up 46% year-on-year, but the load growth behind them is running off-peak, complicating the capacity scarcity argument.
Equinor agreed in August to acquire a majority stake in the Lackawanna Energy Center, a 1,483-megawatt combined-cycle gas plant in northeastern Pennsylvania, from Global Infrastructure Partners in a deal announced August 17. A Rigzone report published Sunday (2026-09-06) placed that acquisition alongside four battery energy storage projects Equinor is developing in Virginia, totaling 80 megawatts and 160 megawatt-hours of combined capacity. Taken together, the moves make Equinor one of the more significant new supply entrants into PJM at a moment when wholesale power costs are at elevated levels.4
PJM wholesale power costs averaged $116.53 per megawatt-hour in the first seven months of 2026, up 46% from $79.57 per megawatt-hour over the same stretch in 2025, according to the grid's independent market monitor. Data center demand accounted for 9% of that wholesale cost, or $10.48 per megawatt-hour, through July, channeled through the capacity market. Across PJM's last four capacity auctions, data center load growth added a combined $29.4 billion in capacity market revenues, a figure the monitor said will keep rising until supply and interconnection constraints are addressed.3
PJM's own load data show the demand profile is more nuanced than the headline cost figures suggest. In the first seven months of 2026, average off-peak load rose 2.6%, or 2,281 megawatt-hours, while average peak load grew just 1.7%, or 1,721 megawatt-hours. Real-time hourly average load increased 2.2%, or 2,061 megawatt-hours.3
Data centers run continuously. Their load fills overnight troughs as reliably as it stacks onto summer peak afternoons. Capacity markets price scarcity at the peak. If measured load growth skews off-peak, the $29.4 billion in capacity auction revenue attributed to data center demand may reflect pricing assumptions set before that load profile was fully observed.3
Into that environment, Equinor is adding dispatchable gas and storage. Lackawanna, which Equinor described as among the largest and most efficient gas plants in PJM, sits inside a grid holding 57 gigawatts of gas combined-cycle capacity, 33.5 gigawatts of nuclear and 37.7 gigawatts of coal, according to the market monitor's half-year report. Wind and solar generated 4.5% and 3.5% of total PJM output through July, with capacity factors of 34.2% for wind and 21.4% for solar in the first half of 2026. Gas still sets the marginal clearing price most hours.4,3
But Equinor's own results complicate any straightforward margin case. The company's power segment posted $1.58 billion in revenue in the first half of 2026, up 43% year-on-year, yet delivered an adjusted operating loss of $31 million over the same period. That loss narrowed 76% from a $126 million deficit in the first half of 2025. PJM's Western Hub spot last traded at $119.29 per megawatt-hour, per 2026-09-06 data. The segment is improving, but it is not profitable at price levels most participants would consider elevated — which says something about what it actually costs to operate across a mixed renewables, storage and gas portfolio in this market.4
A structural constraint on demand-side relief adds to the picture. Canary Media reported that roughly 12 million smart meters installed across PJM — representing close to $6 billion in utility spending — are not sharing data in ways that enable virtual power plants or demand-response programs to function. Independent analysts said such programs could help ease supply pressure. With PJM's interconnection rules also limiting surplus capacity pathways, as Utility Dive reported August 21 (2026-08-21), new supply under development faces a long path to market.1,2
The autumn shoulder months provide the first real test. If October load data show off-peak growth softening as cooling demand fades, the capacity market revenue projections built on continuous data center intensity will face a revision cycle that summer figures alone could not provoke.3,4