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Data Centres: Boom and Backlash
25JUL

PJM auction falls 6,623 MW short

2 min read
11:23UTC

PJM's 2027/28 capacity auction cleared 6,623 MW below its reserve target, forcing a supplemental procurement with a 21 July deadline as the largest US grid hunts for power it has already sold.

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Key takeaway

PJM's 2027/28 auction came up 6,623 MW short, buying power years before the campuses driving demand connect.

PJM Interconnection, the largest US regional transmission organisation, cleared its 2027/28 capacity auction 6,623 MW below its reserve target, and set a 21 July deadline for supplemental procurement to close the gap. A capacity auction is where a grid operator buys commitments from power plants to be available years ahead; the reserve target is the cushion of supply above forecast peak demand it must secure. 1 2

A shortfall this far out means PJM is short of generation it has, in effect, already promised to deliver. It sharpens the question the operator's board put to 13 governors in May, warning that grid-reinforcement costs could fall on household bills unless states write cost-allocation rules first . Every megawatt the auction fails to clear now is one the supplemental round must buy at a premium, and the load driving the gap is data-centre demand that has not yet connected.

Deep Analysis

In plain English

PJM runs the electricity market for the largest US grid area, covering 13 states plus Washington DC. Its most recent auction, which lines up power supply for 2027 and 2028, came up 6,623 megawatts short of the reserve PJM wants to keep on hand as a safety margin, roughly enough to power several million homes. PJM now has until 21 July to buy extra power supply to help close that gap. The shortfall follows PJM's board asking the governors of all 13 states in its territory in May how to fairly split the rising costs data centres are adding to the grid.

What could happen next?
  • Risk

    Capacity-market clearing prices for the 2027/28 delivery year are likely to rise further given the confirmed 6,623 MW shortfall, adding to the cost-allocation dispute already before PJM's board and the 13 state governors.

Sources:Foley Hoag·Utility Dive
Mentions:PJM Interconnection →Washington →
First Reported In

Update #11 · Pipeline vetoed, campus keeps building

Foley Hoag· 25 Jul 2026
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Causes and effects
This Event
PJM auction falls 6,623 MW short
The largest US grid falling short in its own capacity auction shows demand outrunning supply years ahead, before the campuses driving it are even built.
Led to
PJM warns 13 governors on grid costs
The capacity shortfall sharpens the cost-allocation question PJM's board put to 13 governors in May.
Occurred 19 May 2026
Read story →
Different Perspectives
Indian data-centre investors
Indian data-centre investors
Amazon, CPPIB and Google committed billions to Indian data-centre capacity within a single week in June, a market absorbing hyperscale investment while New Mexico and Maryland tighten permitting this fortnight. Every US moratorium makes that alternative more attractive, not less.
Gulf sovereign capital and hyperscale infrastructure investors
Gulf sovereign capital and hyperscale infrastructure investors
GE Vernova's turbine backlog grew to 116 GW and Synergy counted a 45 GW US pipeline the same week New Mexico killed a pipeline outright. Capital keeps moving toward campuses that can secure power fastest, in the Gulf as much as Texas or Virginia.
New Mexico and Virginia regulators, and the counties opposing the build-out
New Mexico and Virginia regulators, and the counties opposing the build-out
Garcia Richard killed Energy Transfer's Green Chili lateral for a second time on 15 July, and Sierra, Santa Fe and Socorro counties layered moratoria on top; Virginia's DEQ, lacking a PFAS rule, issued Amazon's Lake Anna permit regardless. Consent belongs in statute, and New Mexico's 2027 bill is the next test of whether that principle spreads.
Global hyperscale operators
Global hyperscale operators
Operators are still filing gigawatt-scale campuses and Meta is proceeding with its $10bn Lebanon, Indiana site despite the county-level bans nearby, betting Q2 capex outruns the patchwork of restrictions. Industry framing casts New York's freeze, Oregon's surcharge and Indiana's bans as taxes and levies that push build-out toward faster-permitting jurisdictions such as India and the Gulf.
EirGrid
EirGrid
EirGrid set a 900 MW instantaneous demand-loss ceiling because a single voltage dip can trip many data centres onto backup power at once, risking imbalance above 1,150 MW. It wrote the limit into a standing procedure rather than waiting for an emergency to force one.
US host communities and ratepayers
US host communities and ratepayers
Prince William residents backed the 8-0 denial of Dulles South over the Occoquan watershed, drinking water for eight million people, while Oregon's approved tariff cuts residential bills 1.3% by charging large loads 29% more. Their position: consent and cost-attribution belong in law, not left to a developer's or a utility's discretion.