Offshore Wind Can Help Address PJM’s Growing Energy Challenge

Research by Charles River Associates

Offshore wind remains a largely untapped resource that could play a major role in keeping the PJM grid both reliable and affordable.

PJM’s current energy mix includes natural gas, nuclear, coal, renewables, hydropower, and storage. Keeping up with projected demand growth will require significant investment across generation, transmission, storage, and tools to help manage demand. No single energy source can solve the challenge alone.

Utility-scale offshore wind, as part of a balanced energy portfolio, will help sustain the long-term economic growth and stability of one of the most critical power systems in the U.S.

7.8 GW
PJM expects a 7.8 GW capacity shortfall by 2033
5X
Power demand is growing 5x faster than its historical average
$6.2B
Estimated annual reliability cost of the current capacity shortfall if left unaddressed
The challenge

Demand growth is outpacing new supply

PJM serves 67 million customers across 13 states and Washington D.C., operating the largest power grid in North America. Electricity demand is rising faster than it has in decades, driven by data centers, advanced manufacturing, electrification, and heavy industry. New power supply is being added more slowly, even as demand growth accelerates. As the gap between supply and demand widens, concerns about reliability and affordability are intensifying.

Meeting this challenge will require expanding all domestic energy sources, including offshore wind.

Map showing PJM territory across all or parts of 13 states and Washington D.C.
PJM territory: all or parts of DE, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA, WV + D.C. Source: PJM Interconnection.
Chart
The challenge at a glance
PJM electricity demand is projected to grow at 3.6% annually over the next decade, more than five times the historical rate.
Economic growth sectors at stake

The industries driving PJM’s load growth carry significant economic and strategic weight. Capacity shortfalls don’t just raise electricity prices and increase outage risk. They could slow or block the investments these sectors represent, with ripple effects for jobs, national security, and domestic supply chains.

Industry sectors at stake: semiconductor manufacturing, AI and data centers, industrial onshoring, national defense
Economic stakes of insufficient generation
Virginia Data Centers
Northern VA is the largest data center market in the world
$1.8B
estimated annual economic value per GW of data center capacity
Intel Ohio One
semiconductor fab
$2.8B
projected annual contribution to Ohio’s economy, plus tens of thousands of jobs
These investments are contingent on the availability of reliable, affordable electricity at scale. As PJM’s reserve margins tighten, the ability to reliably interconnect large loads without curtailment becomes a material constraint on whether they proceed as planned.
The shortfall

PJM is projected to fall well short of its reliability target by 2033

Virginia is facing the worst of it. The state’s grid is under more strain than almost anywhere else in the country, driven by a massive concentration of data centers in Northern Virginia. At the same time, new power plants aren’t being built fast enough to keep up. PJM tried raising the price it pays to power suppliers to attract more capacity. Even at twice the normal ceiling, the market still came up 6 GW short. More money didn’t fix it because the power simply isn’t there yet.

Chart
PJM’s reserve margin is falling short of its own target
Each year, PJM sets a target reserve margin, the buffer of extra capacity it wants on hand to keep the grid reliable. The bars below show how much PJM actually achieved against that target. Where a bar falls short, PJM came in under its own safety margin for that year.
How offshore wind can help

Offshore wind is built for exactly when PJM needs it most

Offshore wind’s generation profile aligns directly with PJM’s emerging risk. Mid-Atlantic wind is strongest during winter months and evening hours, precisely when the grid is now most stressed and when solar and battery storage contribute least.

~950 MW
A single CVOW-sized project closes nearly 1 GW of the gap
At projected accreditation rates, each MW of offshore wind closes 0.36 MW of PJM’s capacity shortfall. A project the size of CVOW contributes as much accredited capacity as a small nuclear plant or large natural gas plant.
  • Tripling current offshore wind capacity could cut outage risk by 46% in the Dominion zone, where rapid load growth and transmission constraints create acute reliability pressures.
  • Offshore wind generates most strongly during winter nights, exactly when grid stress peaks and when solar and battery storage contribute least.
  • Removing offshore wind from the portfolio would raise inland outage risk by 32% in states like Ohio, West Virginia, and Kentucky, states that never see a turbine but still feel the benefit when it’s there.
Energy Research Exchange
Read the full study
Conducted by Charles River Associates
Full report (PDF)

Research by Charles River Associates, released through Turn Forward’s Energy Research Exchange. Modeling uses PJM’s capacity market construct and CRA’s AdequacyX loss-of-load simulation tool. Base case assumes CVOW operational plus 2 GW of Maryland development by 2033. The 46% load-shedding reduction applies to the Dominion zone under a tripling of current offshore wind deployment. Full methodology in the report appendix. Customer count per PJM At a Glance fact sheet, April 2025.