PJM Grid Set for Storage Expansion Following Interconnection Policy Shifts and State Mandates

Interconnection Reforms Spark Storage Development

The PJM Interconnection appears poised for significant energy storage growth following recent policy reforms and increasing pressure from capacity constraints, according to industry reports. Two recently announced 10-MW battery projects in Virginia signal what analysts suggest could be the beginning of a broader storage expansion across the regional transmission organization’s territory.

Interconnection Reforms Spark Storage Development
Storage Deficit Compared to Other Markets
Regulatory Changes Unlock Capacity
Substantial Pipeline Developing
State-Level Initiatives Add Momentum
Regional Drivers and Benefits

Sources indicate that Patterson Enterprises plans to construct two 10-megawatt, four-hour lithium iron phosphate battery installations within A&N Electric Cooperative’s service area in eastern Virginia. Climate First Bank reportedly provided $32 million in financing for these projects, with the bank’s chief strategy officer Chris Cucci confirming in an interview that the institution is considering funding two additional 10-MW storage projects in the same territory., according to additional coverage

Storage Deficit Compared to Other Markets

Federal data reveals PJM significantly trails other major electricity markets in energy storage deployment. According to the U.S. Energy Information Administration’s most recent battery storage market trends report, PJM began 2024 with just 376.1 MW/378.1 MWh of storage capacity. This compares to 8.1 GW/27.1 GWh in the California Independent System Operator territory and 3.8 GW/5.6 GWh in the Electric Reliability Council of Texas region.

Analysts suggest this disparity stems partly from PJM’s historically lower renewable energy penetration. Maria Scheller, a vice president at consulting firm ICF International, explained that storage resources gain significant value during “duck curve” periods when generation must compensate for fading solar output at day’s end—a phenomenon more prevalent in regions with higher solar penetration.

Regulatory Changes Unlock Capacity

Earlier this year, the Federal Energy Regulatory Commission approved modifications to PJM’s surplus interconnection rules that previously limited storage development. Clean energy trade groups estimate these reforms could potentially unlock approximately 26 GW of interconnection capacity for new resources.

The rule changes come at a critical time for PJM, which has experienced record-high capacity auction prices for two consecutive years. The cost issue has reportedly escalated into a public and political conflict, with some governors threatening to withdraw their states from the capacity market entirely.

Substantial Pipeline Developing

In response to capacity constraints, PJM initiated a fast-track interconnection review that selected 51 projects totaling 11.8 GW, predominantly natural gas facilities. However, Scheller noted that approximately 2.3 GW of storage projects were included in this fast-track process and could come online relatively quickly, in addition to roughly 4 GW of storage projects that already have interconnection agreements., according to related coverage

“In total, we have 7 GW of storage that can materialize very quickly and be meaningful for the next two capacity auction periods in PJM,” Scheller stated, suggesting this development could help address the region’s reliability concerns.

State-Level Initiatives Add Momentum

Several states within PJM’s territory have established storage capacity targets that analysts suggest will further accelerate deployment. New Jersey’s Board of Public Utilities approved a plan in June to procure at least 1 GW of storage through two auctions as part of the state’s broader goal of achieving 2 GW by 2030.

Maryland initiated a solicitation for 800 MW of storage on October 14 as part of a plan to add 1.6 GW statewide. Virginia previously adopted a target of at least 3.1 GW of storage by 2035, though Governor Glenn Youngkin vetoed legislation earlier this year that would have increased that target.

Regional Drivers and Benefits

According to industry observers, multiple factors are driving storage interest in the Delaware-Maryland-Virginia region, including substantial data center growth. Climate First Bank’s Chris Cucci emphasized the efficiency benefits, stating, “If we can put more of these battery storage projects in place … we avoid the need to set up peaker plants, which are typically pretty inefficient.”

A recent Brattle Group report commissioned by the U.S. Energy Storage Coalition concluded that PJM needs to add 43 GW of storage by 2045 to ensure reliability and mitigate cost increases, suggesting the current development represents just the beginning of a longer-term transformation.

For reference: PJM Interconnection overview | Battery storage technology

References

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