The cost of balancing power on the largest electricity grid in the US, PJM Interconnection, has risen to an extreme level as it comes under strain from both heatwaves driving air conditioning use and a surge in demand from new data centers, according to Reuters analysis Thursday of PJM data.
Though the price spikes are exceptional, what stands out is their size, with PJM last week paying up to $28,000 to power plants during heatwave conditions for each additional megawatt they were requested to provide.
That was more than 100 times the usual sums for adjustments to output so far this year, according to a Reuters analysis of data from PJM. Regulators say that demand and supply must always closely match or blackouts can quickly occur, the article said.
When prices surged, to $27,698 per MW, on July 2 around midday, the PJM was operating with a record load of 168 GW, the grid operator said in a report. Demand is rising faster than the grid can add new generation and transmission infrastructure, adding billions in balancing costs to consumer bills, Reuters said.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)