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PJM has proposed market-rule changes that could make it easier to add batteries at existing solar, wind and power-plant connections. Clean-energy advocates say the proposal could ease the region’s capacity pressures, but no new surplus-interconnection project has moved forward since earlier study reforms, and FERC approval of the latest changes could take until late next year.
PJM has proposed market-rule changes that could let batteries and other added resources use an existing power project’s grid connection while selling their energy or capacity separately. The proposal could help bring storage online in the electricity market serving 13 states and the District of Columbia, but no new surplus-interconnection project has moved forward since PJM changed its study process, according to the source report.
The proposed changes address a problem with PJM’s treatment of hybrid resources, projects that combine technologies such as solar and batteries. Under existing rules, PJM generally treats the combined project as a single market unit in both its energy and capacity markets. That can make it difficult to preserve an existing contract for a solar farm while arranging a separate deal for the capacity supplied by a new battery.
Power projects commonly have long-term agreements with utilities, businesses or other customers. Adding storage may require changes to those agreements, particularly when the battery’s capacity is intended for a different buyer. PJM’s proposal would allow the contributions of the separate resources to be identified in its markets, potentially making those arrangements easier to structure. RMI’s Katie Siegner described the idea as “an itemized receipt” that would make it easier to “split the bill.”
The proposal follows work by clean-energy groups in 2024 asking the Federal Energy Regulatory Commission to require changes to PJM’s process for studying additions to existing projects. Those changes addressed technical barriers, but the source report says they have not led to a new project proceeding. Advocates say the unresolved market rules around contracts and resource treatment remain another obstacle.
How Batteries Could Add Capacity
PJM faces growing demand for electricity and a need for additional capacity to meet periods of high use. Batteries can store electricity and deliver it later, potentially helping manage peak demand. Adding storage at an existing grid connection could avoid some of the delay and cost associated with developing a new connection, although the source material does not quantify the savings or establish how many projects would proceed.
The change could matter to data center developers, who are under pressure from regulators to help provide resources for the electricity demand they bring to the grid. The source report says a recent FERC rejection of PJM’s plan for large loads to provide their own capacity has increased interest in other options. RMI’s Siegner said a battery added to an existing solar project could attract an offtaker given PJM’s capacity constraints. That is an assessment, not a confirmed commitment from a buyer or developer.
States with storage targets, including Illinois, Maryland and New Jersey, could also benefit if the rules change and projects are built. The proposal could create a route to use existing infrastructure more effectively, but it would not itself guarantee investment, construction or a particular amount of new capacity.
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The Rules Behind Existing Connections
Surplus interconnection service refers to adding a resource at a grid connection already used by another project. Clean-energy groups pressed for changes to PJM’s study procedures in 2024, arguing that its requirements created obstacles not found at some other grid operators. According to the source report, those procedural changes alone have not produced a project moving forward.
Contract arrangements are another part of the problem. Connor Valaik of LevelTen Energy cited Southwest Power Pool as an example of a market where rules make it easier to add storage to an existing resource, including when the original project has a power-purchase agreement with a different buyer. PJM’s current approach to treating a hybrid project as one market unit can make it harder to divide energy and capacity obligations between separate customers.
The proposed reform is not yet in effect. Even if PJM advances it quickly, the source report says FERC approval could take until late next year. The timeline reflects a regulatory process, not a confirmed implementation date.
““We’re not talking about physical limitations to the grid. We’re just talking about this quagmire of administrative processes and legal rights.””
— Jeff Gordon, Advanced Energy United
Approval, Buyers and Project Timelines
The proposal has not been approved, and the source material does not provide a final decision date, detailed implementation schedule or assurance that PJM will adopt the changes as proposed. FERC approval could take until late next year, according to the report.
It is also unclear how many developers would use the pathway, how much storage could be added, what costs projects would face or whether prospective buyers would sign contracts. No new surplus-interconnection project has moved forward following PJM’s earlier study-process changes, underscoring that procedural reform alone has not been enough.
Claims that the proposal could unlock substantial investment or quickly ease capacity constraints are expectations from advocates, not measured outcomes. The report does not establish how much battery capacity would be built or when it could begin operating.
PJM and FERC Review the Proposal
The next steps are for PJM to advance its proposed market-rule changes and for FERC to review them. The source report gives no confirmed date for a PJM decision or for filing the proposal with the commission; it says approval might take until late next year even if PJM moves quickly.
Developers, existing project owners and prospective customers would still need to work out contracts and project plans under any approved rules. State storage targets and policies requiring utilities to examine surplus interconnection could add incentives, but the scale and timing of resulting projects remain unknown.
Key Questions
What is PJM proposing?
PJM has proposed changes that would let a hybrid project separate the contributions of its different resources in the energy and capacity markets, making it easier to add a battery at an existing connection and arrange distinct market or customer agreements.
Why add a battery to an existing power project?
A battery can store electricity and deliver it later, including during periods of high demand. Using an existing grid connection may offer a way to add storage without relying on a wholly new interconnection, though the source material does not quantify the time or cost savings.
Are projects already moving forward under the proposal?
No. The proposal has not yet been approved, and the source report says no new surplus-interconnection project has moved forward since PJM changed its study procedures.
When could the rule changes take effect?
There is no confirmed effective date. The source report says FERC approval could take until late next year, even if PJM advances the reforms swiftly.
Would the changes guarantee lower electricity costs?
No such outcome is confirmed. Advocates say added storage could help PJM manage peak demand and capacity needs, but the source material does not establish how many batteries would be built or whether the changes would reduce customer bills.
Source: canarymedia.com
