Where's The Data On The So Called Explosive Growth In Electric Demand By Data Centers?
Data Centers Did NOT Drive The Current Huge Spike In NJ Electric Bills
PJM's own data shows that total power auctioned in 2024 was LESS than in 2023. Demand went DOWN.
Show me the data.
According to corporate energy generators and media reports, which have become the conventional wisdom, the so called explosive growth in electric demand by Data Centers is what drove the huge spike in NJ's electric bills this year.
Here's an embarrassingly bad example of that constant talking point: (by Inside Climate News, no less who should know better!):
PJM Interconnection, the nonprofit that manages the country’s largest electricity grid region, is barely known by the general public and almost never mentioned by elected officials—except when something bad happens.
Well, something bad has happened. For two years in a row, PJM’s process for ensuring the grid has sufficient power plant capacity has resulted in record high prices, which will get passed on to consumers. The results are tied to rising electricity demand for data centers and a bottleneck in approving grid connections for new projects.
PJM described as a "non-profit"? Say what? They represent "incumbent generators" - AKA very profitable corporate monopolies. Strike 1.
Bottlenecks? For fossil power or for renewable and battery storage? Say what? And this garbage from Inside Climate News. Strike 2.
But, most importantly, where is the data on electric demand to support this claim? Strike 3.
So let me show you the data that leads to a very different set of conclusions.
According to a Report by the well respected corporate Regional Plan Association (RPA), data centers can not possibly be the cause of the current price spike, because most NJ data centers were built BEFORE 2000 and electric demand from new facilities is PROJECTED to increase in 2027, two years from now:
In our region, most of the data centers were built before 2000, and used a relatively small amount of energy. The next generation of data centers however, planned to open in 2027 and beyond, are projected to consume significantly more energy.
Consistent with that analysis of PROJECTED demand growth, the PJM grid reports data on the total electric capacity that energy producers bid into the power auction that set this year's prices. But PJM, the so called “experts”, projects far less growth than RPA does.
Let’s look at the current situation.
According to PJM's own power auction data, the total energy capacity that cleared in the 2024 Auction that set this year's price was LESS than the prior year.
Repeat: total power auctioned in 2024 was LESS than in 2023. Demand went DOWN.
So there is NO explosive growth in demand.
For the 6/1/25 capacity year:
In the auction, PJM bought 134,672 MW for the capacity year that starts June 1, 2025, according to the grid operator. About 135,694 MW was offered in the auction, not counting energy efficiency resources.
For the 6/1/24 capacity year, the auction cleared MORE capacity:
This year’s auction procured 140,416 MW, excluding Energy Efficiency Resources, for the period of June 1, 2024, through May 31, 2025. Energy Efficiency Resources are excluded from this calculation because their impact is reflected in a lower load forecast and therefore not used to meet the Reliability Requirement. The total FRR obligation is an additional 32,545 MW for a total of 172,961 MW.
Apples to Apples: Total capacity that cleared the auction went DOWN by 5,744 MW, about 4%.
And the 2023 auction "reflected lower load forecast" compared to prior years. So again, there was no explosive growth in demand.
Keep in mind that the PJM capacity charges are supposed to be location based to provide incentives to develop new power capacity where the gap between supply and demand is greatest. That means that capacity charges are larger in State's where demand outstrips supply, compared to other States.
So, the fact the NJ data centers did NOT create explosive new demand growth is highly significant and contradicts the conventional wisdom.
And the PJM data just absolutely destroys the claim that explosive demand growth caused the 2025 spike in prices.
We explained the real primary reasons for the price increases in this post:
Of course, the corporations making windfall monopoly profits do not want those real causes discussed.
Additionally, PJM changed the modeling inputs in their capacity market rules, which were implemented in July 2024. The technical changes to the model are all biased in one direction: to increase demand and thus prices and corporate profits. The fact that all the technical changes are in the same direction is revealing.
Finally, PJM's own demand forecasts project relatively small growth in demand. The PJM 2024 Long-Term Load Forecast predicted annual demand growth of 1.7% for summer peaks and 2% for winter peaks.
After taking severe public criticism - surprise, surprise - PJM significantly increased projected demand in the 2025 Long-Term Load Forecast.
PJM's significant increases in projected "Long term" growth in just one year (2024 - 2025) are highly suspect and raise major red flags. Obviously this was an attempted CYA by PJM.
Hence, the false narrative about explosive growth from data centers.
So, I call bullshit on all these claims, until someone can produce the data to back it up and refute the analysis above.