PJM just ran its latest power auction, and the results matched Charles River Associates‘ projections from a report released last month. PJM’s message this week was simple: the grid needs more electricity, from every source that can deliver it, including offshore wind.
The News
PJM’s latest auction came up short, again
On July 14, PJM released the results of its newest power auction, the yearly process that lines up electricity supply for more than 67 million people across the mid-Atlantic and Midwest. The auction secured 138,318 megawatts of power for the 2028/2029 delivery year. Utilities that manage their own supply added another 10,864 megawatts, for 149,182 megawatts in total. Prices came in at $325 per megawatt-day, the maximum allowed under PJM’s current rules and slightly lower than last year’s cap of $333.44.
Even at that price, PJM did not secure enough power to meet their own safety requirements. The auction fell 6,831 megawatts short of the reserve level PJM needs to maintain a reliable grid. This is the second year in a row where the whole grid fell short despite high prices paid to generators, something that has never happened in two consecutive years before. As a result, the reserve margin, the safety cushion PJM keeps on hand for heat waves or unexpected generator outages, now sits at 14.7%, well below the roughly 20% margin PJM held through most of the last decade.
Why It Matters
The 2033 problem is arriving early
Charles River Associates (CRA) warned about this exact trend in a report released this June. CRA projected PJM would face a 7.8 gigawatt shortfall by 2033, driven by data centers, semiconductor plants, and factories switching to electric power, together pushing demand up five times faster than the historical rate. PJM’s latest auction came up 6.8 gigawatts short, putting the region closer to the projected gap years ahead of schedule.
The chart below illustrates this story using PJM’s projected reserve margins. PJM has historically cleared its auctions with room to spare above its safety target, but their own projections said that cushion would turn into a shortfall by 2028. This week’s actual result, 14.7%, landed almost exactly where the projection predicted.
Chart
Reserve margin figures for 2026 to 2028 are PJM projections; the 2028/2029 figure is now consistent with PJM’s confirmed auction result. Source: PJM Interconnection
New supply isn’t keeping pace. Only 525 megawatts of power from new or upgraded facilities cleared in this auction, a small fraction of the additional resources needed to close the gap.
What Can Help
PJM needs every megawatt it can get
Closing a gap this size will take more than one energy source. Natural gas, storage, transmission upgrades, tools to help manage demand, and offshore wind all need to work together. Offshore wind can’t close PJM’s shortfall alone, but every megawatt that gets connected to the grid matters, and offshore wind brings significant power to the part of the grid under the most strain.
The Coastal Virginia Offshore Wind project is the only offshore wind farm delivering power in PJM today, and it connects directly into Dominion, the most stressed part of the grid. CRA found that tripling today’s offshore wind investment could cut outage risk by 40% across all of PJM, and by 54% in Dominion alone. PJM shares credit for new power across its whole territory, so those benefits reach inland states too. Ohio, West Virginia, and Kentucky would see outage risk drop by nearly a third under the same scenario, even though none of them have turbines offshore.
PJM’s reliability risk is shifting from summer- to winter-peaking, and offshore wind generates most strongly in winter and evenings, exactly the hours when it is needed most. Every additional megawatt of offshore wind is also one less megawatt of natural gas turbine capacity that utilities have to compete for. The supply chain for new gas turbines is backed up, so easing that pressure helps the whole system, not just one part of it.
Bottom Line
Build faster, on every front
PJM’s own leadership said it plainly this week: demand is growing faster than supply. Closing that gap means bringing new power online as fast as possible, across every technology that can deliver it. Offshore wind is part of that answer. This week’s auction confirms what CRA’s modeling indicated: the fastest path to a reliable, affordable grid runs through more supply, not less. Every electron helps.
The research was commissioned in part by Turn Forward and reviewed by CRA prior to publication.