PJM Capacity Gap Widens as Build Constraints Outlast Approvals
PJM approved significant new clean power in late August, but turbine backlogs and contractor shortages threaten delivery well before the 2028/2029 peak demand window closes.
PJM Western Hub spot power was priced at $73.72 per megawatt-hour as of 2026-08-27, as doubts mounted over whether a newly approved wave of generation can be built in time to close the grid's documented capacity deficit. Canary Media reported Monday (2026-08-24) that PJM had greenlit significant volumes of new clean power, but found that construction constraints, not approvals, now define the delivery timeline.6
The deficit is on record. PJM's most recent capacity auction came up 6.8 gigawatts short, Oil Price reported, and Monitoring Analytics, the grid's independent market monitor, found that PJM power prices jumped 76% in the first quarter of 2026, driven by accelerating data center load. A 76% price swing in a single quarter shows how fast conditions shift when new supply cannot keep pace with demand.3
Capacity for the 2028/2029 delivery year cleared at $554.72 per megawatt-day, the system-wide regulatory cap, with the COMED local delivery area reaching $776.69. PJM data show that absent the cap, clearing prices would have been roughly 70% above the $325 reference level. Generator payouts for the year starting June 2028 matched the all-time record of $16.4 billion set in December, PJM said.3
Manufacturing backlogs for gas turbines and fierce competition for engineering and construction firms are pushing project timelines beyond what the approved interconnection queue implies, Canary Media reported Monday (2026-08-24). Battery storage carries a meaningful time-to-power advantage over new gas plants, particularly when turbine delivery slots run years out. But batteries secure lower capacity payments than gas generators in PJM's market structure, limiting how far they can substitute.6
The load driving those auction prices is not moderating. Grid Strategies projected US data center market growth of at least 65 gigawatts and as much as 90 gigawatts by 2029. DataM Intelligence estimated global AI data center electricity consumption at approximately 565 terawatt-hours in 2026, up from 447 terawatt-hours in 2025, and put the global AI data center market on a compound annual growth trajectory of 22.8% through 2035.1,4
That demand trajectory prompted PJM to move its backstop reliability auction to September this year, dropping the original 2027 timeline. The grid operator said in May (2026-05-21) that further delay posed unacceptable reliability risks given the pace of load growth. Moving the auction forward gives PJM a longer runway to secure capacity before the 2028/2029 delivery year.2
A second September deadline runs alongside the auction. FERC's chairman warned in July (2026-07-24) that the commission would impose governance reforms on PJM if the grid operator did not act first. The chairman described broad stakeholder agreement on increasing board independence from member control, with disagreement confined to specifics around the reform package.5
But governance changes, even if adopted in September, come too late to fill the 6.8-gigawatt gap already embedded in the 2028/2029 delivery year — and do nothing to shorten turbine manufacturing queues or free up construction crews. A restructured board might process interconnection requests more efficiently, but that benefit arrives in future delivery years, not the current one.5,6
Gas turbine backlog timelines, not the auction itself, are what determine actual megawatt delivery by 2028. September's backstop auction clearing prices — and any widening of the COMED premium beyond $776.69 — will show how far the supply shortfall has shifted since December's record-setting result.3,2