As AI drives energy demand, PJM eyes hundreds of new power projects, including a potential first-ever nuclear fusion plant

Amid ever-ratcheting pressure to meet energy demand, PJM announced Wednesday that it is reopening a process for power developers to connect to the regional grid it operates following a multiyear pause.

PJM said 811 new power generation projects have applied for interconnections to help meet increasing demand. PJM expects electricity demand to increase rapidly between 2024 and 2030, driven largely by data centers being built to power artificial intelligence.

Almost befittingly, PJM will turn to a Google AI product to speed up its new vetting process for new power generation applicants. The goal is to approve projects that are ready to move forward quickly, rather than those that happened to be ahead in the queue whether they were ready or not.

One of those projects is for nuclear fusion and, if approved, would be the first of its kind for the grid. Battery storage, natural gas, solar, and wind are also in the mix.

“The reformed process replaces PJM’s prior first-come, first-served model with a first-ready, first-served approach, prioritizing projects that are more advanced and better positioned to move forward,” PJM said in the announcement.

PJM’s interim president and CEO David Mills said the process is designed to get “as many projects approved as quickly and safely as possible.”

PJM paused processing applications in 2022 to address a massive backlog and to implement reforms. It expects it will take between one and two years to approve a power generation applicant.

As the regional grid operator, PJM coordinates wholesale electricity throughout 13 states, including Pennsylvania and New Jersey, as well as the District of Columbia, overseeing the flow of power for 65 million people. A key function is to ensure there is enough power being generated to meet demand.

PJM said last year that it had failed to find enough power generation to meet anticipated demand for 2027 and 2028 in its capacity auction.

An independent organization, PJM is part of a complex process currently playing out over the demand wrought by data centers and the impact on consumers through both rates and reliability. Although PJM doesn’t set retail rates that homeowners pay their local utilities such as Peco, its wholesale power auctions influence those rates.

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Rates rise when there isn’t enough power being generated to meet demand. Consumer and environmental advocates also warn that failure to find enough capacity creates a risk of rolling blackouts during extreme weather. They fear more data centers would exacerbate the situation.

Jon Gordon, a director at Advanced Energy United, a trade association, called PJM’s reopening of the interconnection application queue the removal of “a huge barrier.”

“Our industry is eager to see whether PJM is able to study and connect new energy projects more quickly going forward,” he said.

If so, that could lead to more “low-cost clean energy and storage,” Gordon said.

PJM said its new application process will require “meaningful up-front financial commitments” and other proof from power plant developers that they are ready to get online quickly. PJM will use HyperQ, an AI tool developed by Google, to help vet and study the highly technical applications.

Jeff Shields, a spokesperson for PJM, said it’s difficult to compare this new round of project reviews to the past because it is “a completely new process.”

As a basis for comparison, Shields said, PJM has processed a total of 300 gigawatts (GW) of projects since 2020.

PJM‘s next round of proposals total 220 GW. One gigawatt can power 300,000 to 750,000 homes depending on consumption, according to the Department of Energy. At the low end, that’s the equivalent power used by 66 million homes.

The types of power in the queue awaiting possible approval include: 349 battery or other storage projects, 157 natural gas, 142 solar, 65 wind, 65 solar-storage hybrids, 27 nuclear, 11 hydroelectric, and 15 “other,” which can include coal.

In the amount of potential power, natural gas is at the top with 105.8 GW, followed by storage at 66.5, nuclear at 17.9, solar at 14.8, solar-storage hybrid at 8.9, wind at 4.7, hydro at 0.15, and other at 0.5.

PJM has been criticized by environmental groups in the past for not approving more solar and wind power generation projects, given that 90% of proposed new projects in the interconnection queue the last few years have been for renewables.

Shields said he could not release where the potential generation sources are concentrated until the applications are vetted and officially accepted.

However, Pennsylvania is the second largest producer of natural gas in the United States, behind Texas, which is part of a different regional grid.

Rob Altenburg, senior director for energy and climate at the nonprofit advocacy group PennFuture, said he welcomed PJM’s consideration of battery storage.

“It’s great to see that storage leads the project count for the first time because ultimately energy storage technology opens the door for more diverse projects to come onto the power grid,” Altenburg said.

Altenburg said he’s still concerned about “Pennsylvania’s overreliance on expensive, polluting gas plants.”

Shields said he could not confirm details of the application for a nuclear fusion plant.

However, Commonwealth Fusion Systems, a private company, announced Tuesday that it has applied to PJM to build the first nuclear fusion plant within the grid. The report said the company hopes to open a plant in Virginia by the early 2030s.

Nuclear fusion is the energy source of stars, including the sun. It occurs when two atomic nuclei are combined to form a new nucleus, releasing a powerful amount of energy. However, there are no commercial fusion plants in operation, though some are in development.

“We are encouraged by the diversity of generation types that are seeking to join the PJM generation fleet,” Mills said in PJM’s announcement, without specifying projects.

“That includes first-time innovative technologies such as small nuclear reactors and fusion, more storage projects than any other technology, a resurgence in natural gas, and continued strong participation by renewables and hybrids. This is good news because we need all the generation we can get.”