VALLEY FORGE, Pa. — The PJM Markets and Reliability Committee discussed how the development of new capacity can be sped, as a growing number of resources have cleared the interconnection queue but not entered commercial operation. 

PJM Vice President of Planning Paul McGlynn said the cluster-based approach to studying interconnection requests has increased the pace of processing projects, estimating that 72 GW of new generation will clear the queue by the end of 2025. Thus far, only 2 GW has actually come into commercial service, and most of that is solar resources with a relatively small capacity contribution. 

Lead time for equipment, local opposition and financing all remain obstacles for developers, McGlynn said, adding that this represents a call to action for stakeholders to identify and work to remove those barriers. 

“We need to get the resources that are going to move forward, we need to get them connected to the grid so they can help us out with the resource adequacy issues that we are having,” he said. During the Aug. 6 Planning Committee, PJM stated that generation deactivations, rising load forecasts and sluggish resource entry are contributing to a possible capacity shortfall in the 2029/30 delivery year. (See “PJM Models Suggest Capacity Shortfall Possible in 2029/30 Delivery Year,” PJM PC/TEAC Briefs: Aug. 6, 2024.) 

The growing number of resources with service agreements that have not entered operation presents planning staff with challenges when identifying possible transmission reliability violations. PJM’s Jason Shoemaker said planned generation resources are modeled the same as operating units, creating instances where resources are assumed to be injecting MWs onto the grid when they actually still will be under development. That is driving up the number of violations and their complexity, he said. 

Vitol’s Jason Barker said PJM has implied that developers are moving through the interconnection process and leaving projects idle, a characterization he said misses work like permitting and siting that must be completed before the “boots on the ground” phase can begin. While some of the legwork used to be done while projects moved through PJM’s interconnection queue, he said the amount of time it now takes for projects to be processed has transformed a concurrent interconnection, permitting and siting process into a serial one. 

“Permitting is time consuming [and] costly, and permits expire. So the development community, as I think you’ve acknowledged, has real work before the shovels go in the ground, boots go on the ground. So, we have a really strong concern with the messaging that PJM has provided here,” primarily because it misleads the stakeholder community as to the diligence developers have in completing their projects, Barker said. 

Some of the same procurement challenges developers have faced also are affecting transmission owners’ ability to complete network upgrades necessary to allow resources to come online, with transformers, breakers and other components in short supply worldwide.  

“We very much want to bring our projects to completion and are working diligently to do so,” he said. 

Rather than focusing on the number of projects that still are in some phase of development, Barker said the focus should be on PJM’s success in canceling the queue positions of projects it has determined are not advancing toward commercial operation. 

Shoemaker said PJM has a cure process when a project misses development milestones, which typically lasts a few months before either a suspension is granted, the breach is remedied or the project is removed from the queue. He said about 75% of developers’ requests to change their agreements are granted by PJM. 

Tangibl Group Director of RTO and Regulatory Affairs Ken Foladare said PJM is making good progress in clearing projects faster. But the amount of time projects already have been in the queue has affected their ability to progress with permitting and financing. He said one project was seeking commercial operation in 2027, but the transmission owner said the earliest that would be possible was 2030 to 2031. Any permits received that far out would expire before work could begin. And financing also is unlikely to materialize that far in advance. 

Shoemaker said transmission delays can happen, and projects affected would be considered in the engineering and procurement phase. He said PJM’s focus when negotiating milestone deadlines is a project specific review of whether a developer is doing everything in its power to move projects toward completion. On the other hand, he said granting delays can affect other developers in line behind that project, who need to be given a fair shot at advancing as well. 

Calpine’s David “Scarp” Scarpignato said there have been issues with how project suspensions and delays affect others in the queue, as well as possible reliability impacts as PJM models the injection of power from resources that are not built according to schedule. Even if network upgrades are completed on time, he said that could lead to energy not being available where it was expected. 

PJM CEO Manu Asthana said blame is irrelevant and the focus should be on what would improve completion rates. Capacity costs increased in the last Base Residual Auction (BRA) and the price cap is set to increase in the 2026/27 auction, stressing consumers. On the other side, he said forecasts of load growth continue to accelerate and could remain an undercount. 

He said PJM views a recent transaction in the footprint to purchase power outside the market for 20 years as a data point showing that demand is real. He encouraged stakeholders to deconstruct the deal and its implications on the capacity market. On Sept. 20, Constellation Energy announced an agreement with Microsoft to reopen and rename its 835 MW Three Mile Island Unit 1 the Crane Clean Energy Center with a 20-year power purchase agreement. (See Constellation to Reopen, Rename Three Mile Island Unit 1.) 

While solar and wind are viable in PJM and more renewables are beneficial, Asthana said they don’t provide the capacity needed by the end of the decade. If new construction is needed, he said there should be a corresponding price signal and that resource adequacy solutions must come through the interconnection queue. 

“I think it’s a generational challenge for us and we’re going to have to solve it together,” he said. 

Foladare commented that PJM’s wholesale market rules and price signals are leading developers to drop the storage component of some hybrid resources, leaving products that have limited utility as capacity. How batteries are accredited under PJM’s marginal effective load carrying capability (ELCC) approach has made standalone and hybrid installations less economically attractive. 

“Something has to be done in this area if you want to see more solar with storage or wind with storage,” he said. 

Asthana pointed to record-high clearing prices in the 2025/26 BRA and said he is hearing that high prices are needed to enable widespread storage development while consumers are stating prices are unsustainable. 

“We want more storage … but we hear it loud and clear that consumers don’t want high prices and right now those two things do not match,” he said. 

Foladare said capacity prices make up a relatively small portion of the potential revenue for storage. The overall cash flows from energy, ancillary services and capacity are not sufficient to cover the incremental cost of installing storage, he said. He suggested a fast-ramping product could fit the capabilities of storage better.