PJM Opens Reform Path to 24 GW of Storage at Existing Plant Sites

PJM Interconnection could unlock 24 gigawatts of battery storage at existing power plant sites through surplus interconnection service, according to Lawrence Berkeley National Laboratory research — and the grid operator has finally agreed to start rewriting the market rules blocking it.

PJM's Market Implementation Committee is set to consider next steps at its Nov. 4 meeting, said Jon Gordon, senior director at Advanced Energy United. If a plan wins approval, PJM could finish the changes and seek FERC permission as early as April 2027. FERC's decision might take until late next year.

The stakes are large. PJM, the largest U.S. grid operator, serves customers across 13 mid-Atlantic, Midwestern and Southern states. Its territory is congested, data center demand is surging, and capacity costs for peak periods — hot summer afternoons and cold winter mornings — have skyrocketed in recent years.

What is surplus interconnection service?

FERC has directed grid operators to enable battery additions at existing plants under Surplus Interconnection Service rules. Batteries absorb excess power when it is not needed and inject it through existing grid connections when a plant is not generating at full capacity.

Elsewhere, the mechanism is booming. Surplus Interconnection, a consultancy, has tracked 44 GW of historical SIS project requests as of mid-2026, about 80% of them battery additions.

• Midcontinent Independent System Operator: 14.8 GW proposed across 138 active requests
• Southwest Power Pool: 14.3 GW across 89 active requests
• The U.S. West: 6 GW across 51 active requests
• The Southeast: 1 GW across 29 active requests

PJM's record: 14 requests submitted, two approved, as of its most recent update in November 2025.

"It's clearly catching on," said Gavin Ahern, co-founder of Surplus Interconnection. Notable projects include NextEra Energy and Great River Energy adding batteries to North Dakota wind farms, batteries at California gas plants, and solar added to gas plants in Illinois.

What would the numbers allow?

Berkeley Lab's Umed Paliwal, a principal scientific engineering associate in the Electricity Markets and Policy Department, estimates PJM could add 24 GW of storage through SIS at existing sites, plus 102 GW of solar and 28 GW of wind sharing grid connections with gas peaker plants.

SIS projects could save developers more than $31 billion in interconnection costs and grid upgrades, Paliwal's data shows. Because they ride existing connections, they can deliver capacity in one to two years — far faster than new projects stuck in PJM's backlogged queues.

"Renewable energy developers have been among the quickest to see the potential," Ahern said. "They're looking to get more out of sites they've already paid to connect."

What has blocked batteries in PJM?

Two barriers remain. PJM fixed the first in early 2025, when FERC approved changes to how it studies grid impacts of added resources, after clean energy groups complained in 2024 about technical barriers other operators do not impose. No new SIS project has moved forward since.

The second barrier concerns market design. PJM treats a hybrid resource — a project combining technologies — as a single "market unit" in both energy and capacity markets. That blocks deals where a solar farm serves one offtaker under a power purchase agreement while a new battery sells capacity to a different customer, such as a data center.

Southwest Power Pool "makes it easier to add batteries to existing resources," said Connor Valaik, senior transactions manager at LevelTen Energy. "You can add surplus storage, and sell the capacity rights from that."

PJM has now proposed letting hybrid projects separate the contributions of their resources in both markets. "You might think of it as an itemized receipt," said Katie Siegner, a manager on RMI's Clean Competitive Grids team. "It makes it easier to split the bill."

What happens next?

The reforms could add storage to existing plants or to the tens of gigawatts of clean projects already cleared to connect to PJM. States with storage targets — Illinois, Maryland, New Jersey — stand to benefit, and Indiana and Virginia have passed laws requiring major utilities to analyze surplus interconnection potential.

Timing pressure is growing. Earlier this month FERC rejected PJM's plan to require data centers and other large loads to supply their own capacity or face curtailment during grid emergencies. Data center developers needing fast capacity options may now bankroll batteries, Gordon said.

"Given PJM's desperate situation for capacity, anything that would help PJM manage peaks better — like getting batteries online — would make a massive difference," he said.

The milestone to watch: the Nov. 4 Market Implementation Committee meeting, which determines whether the April 2027 FERC filing date holds.