The challenge
PJM is short of capacity. PJM cleared its 2028/29 capacity auction at its $325 per MW-day cap and came up 6.8 GW short of its reliability requirement.
PJM expects its summer peak to grow 42 percent from 2026 to 2036. Data centers make up most of the growth. PJM's forecast puts the 2036 summer peak at 222 GW.
192 GW of new projects wait in PJM's interconnection queue. Projects in PJM take a median of 83 months from request to operation, against 61 months nationally.
A new gas plant is expensive and slow. One ordered today costs over $3,000 per kilowatt and would first run in 2033 to 2034.
Surplus interconnection
New solar, wind and batteries can be added at existing plants through surplus interconnection.
Surplus interconnection service introduced by FERC in 2018 allows new generation and storage to be added at underutilized existing interconnections.
Renewables at fossil plants
- A large share of PJM's fossil capacity runs at very low capacity factors, leaving interconnection capacity unused.
- The owner has already paid for that interconnection, and a new project can share it under a bilateral agreement.
- Order 845 requires PJM and other grid operators to offer that unused capacity to a new project.
- New solar or wind uses only the interconnection capacity the plant leaves unused each hour.
- The plant keeps its full interconnection rights, and together the two never exceed the interconnection capacity.
Batteries and new generation at renewable plants
- U.S. solar plants run at about a 24 percent capacity factor and wind plants at about 34 percent.
- So they leave most of the interconnection they paid for unused. In some hours their output is also curtailed.
- They also add little accredited capacity, because PJM gives them low capacity value.
- A battery raises a solar plant's capacity value, because batteries have much higher capacity values.
The market response
324
Active surplus requests, U.S.
47.5 GW
Capacity in those requests
2.4 GW
Projects operating today, U.S.
18
Active surplus requests in PJM
Surplus projects reach operation faster than other new projects. Seven surplus projects in the Southwest Power Pool (SPP) took 17 to 30 months from request to operation, against a median of 61 months across all U.S. queues in 2025. By PJM's rules a surplus battery needs 21 to 23 months from request to operation.
PJM lists 18 active surplus requests. They total 2.3 GW, and none operates yet.
Across the U.S., at least 2.4 GW already operates under surplus interconnection. None of it is in PJM.
Rules as of November 2026. Surplus rules change often, so the latest rules could differ.
Methodology
1Resource assessment
- We studied 239 fossil plants and 275 solar and 94 wind plants in PJM.
- Around each plant we mapped the buildable land in a 20 km square, about 12.4 miles on a side.
- Exclusions and setbacks take out land where solar or wind cannot be built.
- Fixed densities turn that land into MW of solar and wind potential.
2Economic analysis
- Hourly solar and wind output at each plant follows 2019 weather.
- New solar and wind are added at fossil plants only where they cost less in 2030 than running the plant.
- Solar and wind plants have no fuel cost to compare with, so their additions are sized to send the most energy through the interconnection.
- Costs come from BloombergNEF and include no federal tax credit for new solar or wind.
3Portfolio optimization
- Each fossil plant runs as it did in 2025, and new solar or wind uses only the interconnection capacity the plant leaves unused.
- To maximize interconnection utilization, we add 28,071 MW of 4-hour batteries at solar and wind plants, each sized to its plant's nameplate less any battery already there.
- Our hourly dispatch model sizes the new solar and wind so that curtailment and battery losses stay within 5 percent of output.
- Each plant and its additions stay within the existing interconnection in every hour.
4Capacity values and savings
- We rate the new batteries with PJM's 2029/2030 class ratings, 57 percent for a 4-hour battery.
- PJM accredits a surplus battery only when it joins the plant as one hybrid, within the plant's CIRs.
- A fossil or solar plant's own accredited capacity uses only part of its CIRs.
- To maximize accredited capacity instead, we add 64,091 MW of 4-hour batteries at fossil and solar plants to fill the rest of those CIRs.
- But when a fossil plant runs, its output fills all or most of its CIRs.
- So its battery adds accredited capacity mainly in the hours the plant is out.
- Together these batteries add 13,916 MW of accredited capacity.
- We price the interconnection cost avoided with the average cost of interconnection requests studied from 2019 to 2023.
- The average is $206 per kW in PJM.
- Pennsylvania has enough studies for its own average of $168 per kW.
Results
PJM's existing plants can add 39,553 MW of solar and 11,314 MW of wind, and renewable plants can add 28,071 MW of 4-hour batteries. In total, PJM's existing plants can add 78.9 GW of new nameplate capacity.
39.6 GW
Solar added
11.3 GW
Wind added
28.1 GW
4-hour batteries added
$16.1 billion
One-time interconnection cost avoided
Totals may not add because of rounding.
Existing interconnections avoid $16.1 billion of one-time interconnection cost
Developers of the new projects avoid this one-time cost because they share an interconnection that is already paid for.
Interconnection requests studied in PJM from 2019 to 2023 cost a size-weighted average of $206 per kW, and $168 per kW in Pennsylvania. Priced at these costs, the new projects avoid about $16.1 billion. Priced at the lower costs of projects now operating, they avoid $3.7 billion. Priced at the average of every request, withdrawn ones included, they avoid $18.7 billion.
These figures are upper bounds, because a surplus request can still trigger network upgrades. We do not estimate how much of the avoided cost reaches bills.
Fossil plants
PJM's fossil plants are underutilized. In 2025, 24 percent of their capacity ran below a 15 percent capacity factor. New solar and wind can use the interconnection capacity these plants leave unused, without a new interconnection.
New solar costs less than running 14.7 GW of PJM's fossil plants by 2030. We compared each plant's running cost per MWh with the cost of new solar at its site. We count new solar as economic only where it costs less than running the plant. Most of the plants that can add solar ran below a 5 percent capacity factor over 2021 to 2025. So new solar uses the many hours each plant leaves unused. Those 14.7 GW of plants can add 10.5 GW of new solar.
The fossil plants run as they did in 2025. Each plant keeps its output and all its CIRs. Surplus interconnection gives the new solar no CIRs of its own. So under PJM's rule today the 10.5 GW of new solar adds no accredited capacity.
Fossil plants can also add 843 MW of new wind. Setback rules and the wind resource decide where new turbines can go near these plants.
143.3 GW
Nameplate, 239 fossil plants
34.2 GW
Below 15 percent capacity factor
10.5 GW
New solar
843 MW
New wind
Solar and wind farms
PJM's renewable plants are underutilized in two ways. They use little of their interconnection capacity, and they add little accredited capacity. A new battery or new generation can use what they leave unused.
They use little of their interconnection capacity. In 2025 solar plants ran at a 20.4 percent capacity factor and wind plants at 31.8 percent.
The plants can add 28.1 GW of 4-hour batteries. Each battery is sized to its plant's nameplate capacity, less any battery already there. These batteries add an estimated 5,059 MW of accredited capacity, all of it at the solar plants. A battery at a wind farm adds none, because the wind farm's accredited capacity already fills its CIRs.
The same plants can also add 29.0 GW of new solar and 10.5 GW of new wind. The new solar and wind charge the battery, which sends that energy out later at night without changing the original plant's output. New wind is added only where the wind resource is good.
The plants would use more of their interconnection capacity. Their interconnection utilization would rise from 26 to 60 percent. At the solar plants it would rise from 21 to 54 percent. At the wind farms it would rise from 32 to 69 percent.
28.1 GW
4-hour batteries added
29.0 GW
Solar added
10.5 GW
Wind added
60 percent
Interconnection utilization with the additions
Policy recommendations
1Procure batteries at existing interconnections.
State commissions could order pilots that buy batteries at existing renewable plants. PJM's renewable plants can add 28.1 GW of 4-hour batteries.
Modeled on
Virginia's 2026 law has Dominion and Appalachian Power run battery and solar pilots at surplus interconnection sites. Maryland and New Jersey already let surplus projects compete in their battery procurements.
2Study unused interconnection capacity plant by plant.
State commissions could order a study that shows developers where batteries and solar could be added. Today interconnection utilization is 21 percent at PJM's solar plants and 32 percent at its wind farms.
Modeled on
Indiana's 2026 law orders its utility commission to study surplus interconnection. Virginia's 2026 law has Dominion and Appalachian Power report on surplus interconnection at each of their solar sites.
3Examine surplus interconnection before building a new plant.
State commissions could have utilities examine whether surplus interconnection can meet new demand before a new plant is approved. In 2025, 62.5 GW of PJM's fossil capacity ran below a 30 percent capacity factor.
Modeled on
Under Indiana's 2026 law, regulators weigh a surplus interconnection analysis when a utility asks to build a plant. Indiana and Virginia also require it in utility resource plans.
4Speed up permits for batteries at solar plants.
States could let a battery at a solar plant go ahead under the plant's existing local approval. PJM's solar plants can take most of the 28.1 GW of new 4-hour batteries, each sized to the plant's nameplate.
Modeled on
Since July 2026 Virginia lets a battery inside an approved solar site go ahead without further local land use approval. The battery can be as large as the solar plant's nameplate.
5Let surplus projects earn capacity value on their own.
PJM could give each surplus project its own share of the existing plant's capacity interconnection rights. The 10.5 GW of new solar at PJM's fossil plants would add no accredited capacity today.
Modeled on
PJM's Manual 21B already lets the separate parts of one plant split its capacity interconnection rights.
Sources: Indiana Public Law 126-2026; Virginia 2026 Acts of Assembly, Chapters 607, 608, 1011, 1013, 1076 and 1089; Maryland Chapters 625 (2025), 353 (2026); P.L.2026, c.2 of New Jersey; PJM Manual 21B, Revision 05; PJM Market Implementation Committee, 4 November 2026. Surplus rules change often, so the latest rules could differ. This analysis takes no position on any enacted, pending or failed bill.