Market Intel
PJM
PJM
Market Overview
PJM, the largest RTO by load and population, manages transmission and wholesale electricity markets in 13 US states + D.C. serving ~65M people. With an expected 30 GW load growth by 2029 (+18%) and peak demand potentially reaching 200 GW by 2033, PJM’s market presents enormous opportunities — but also immense challenges — for energy storage developers and operators.
Currently, PJM is the dirtiest market in the U.S., with the majority of energy coming from coal (11%) and natural gas (75%). Furthermore, it has a long and grueling interconnection process and the market is still working through the best ways to incorporate energy storage.

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30GW
Load growth expected by 2029 -
200GW
Peak demand could hit 200GW, rising 2% a year on average
While PJM has yet to fully integrate energy storage into its system, key developments like the Energy Storage Resource (ESR) participation model and growing demand for clean energy solutions are laying the groundwork for storage to thrive – but there is work to be done.
Market Structure
PJM’s wholesale market matches the lowest cost electricity supply – energy from generators – to meet demand. This energy is purchased by resellers (utilities, etc.) to then resell to end users.
Market participants
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Maintains reliability and manages the market to balance energy demand with supply.
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Entities purchasing energy and related services. Buyers can be either metered (directly tied to specific loads) or unmetered (serving aggregated or distributed loads).
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Entities offering generation or demand-response resources into the market.
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Your market navigator and asset operator; a platform leveraging real-time data and predictive insights to help maximize revenue, ensure optimal performance and grid stability.
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Organizations responsible for serving end-user electricity demand, procuring energy and capacity through PJM markets.
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Participants providing demand-side management by reducing load during periods of high demand or grid stress.
Energy Storage Participation Models
Standalone a hybrid resources participate in the market in a few ways:
Market products
PJM operates several markets and strives to find the lowest cost way to meet energy demand.
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Energy
Bidding into energy products can see high returns from energy arbitrage, and provides flexibility to lock in returns through the Day-Ahead Energy Market, or capture sudden price spikes in the Real-Time Energy Market.
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Ancillary Services (AS)
This almost acts as offering insurance to the grid. You will get a payment for holding capacity, or offering to scale down generation, in moments where there is a mismatch between supply and demand. Bidding into AS can yield consistent returns, and can deliver outsized revenue during scarcity events.
Capacity Market
A forward-looking mechanism where utilities procure commitments for energy resources to be available in certain periods – three years in advance. The 2024 auction saw record-high capacity prices, ~7x higher than the previous year. Among other things, the increase was driven by growing demand and limitations on which resource types were able to participate.
Storage Opportunities
Opportunities for storage operators are limited at the moment – but the market acknowledges the need to evolve. The following trends highlight key areas for growth and revenue potential:
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Load Growth
With rising demand for electricity across the region, and especially near data centers in northern Virginia and Pennsylvania, and new manufacturing investments in Ohio, the need for flexible resources is growing.
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Increasing Renewable Integration
More renewable generation resources are entering the interconnection queue, and getting deployed in PJM (solar +55.8% in the first 9 months of 2024). As the resource mix shifts more towards renewables, intermittency will increase, making storage critical for reliability.
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Wholesale market revenue
Both RT and DA LMPs were up year-over-year.
- RT: increased $3.44 per MWh, or 11.1 percent from the first nine months of 2023
- DA: increased $1.95 or 6.1 percent from 2023
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Other Revenue Streams
Capacity auction and state-level policies provide additional, potentially lucrative revenue streams for energy storage resources.
State-Level Indicators
PJM’s footprint includes states with diverse storage policies and incentives that directly impact development opportunities.
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Storage target:
2GW by 2030- 4 hour duration required (shorter assets will be derated to reflect discharge over 4-hour period)
Clean energy target:
100% clean energy by 2035Energy Storage Incentive Program:
Front-of-meter incentive (expected in early 2025):-
- Fixed payment awarded annually through competitive bid process (first solicitation July 2025)
- measured in $/kWh of maximum usable energy storage capacity and paid one time upon commercial operation
- Future-state: performance payments based on avoided greenhouse gas emissions (contingent on reliable DA emissions data becoming available)
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Storage target:
2.7GW under construction by 2035Clean energy target:
100% clean energy by 2050 -
Storage target:
4GW under construction by 2033Emerging incentives:
PSC has been required to establish storage program by July 2025, including incentives for developers. -
Storage procurement target:
2.5GW by 2029Renewable Portfolio Standard (RPS) target:
100% by 2040 -
Storage procurement target:
7.5GW utility-scale and 1GW distributed (pending)
- There are also storage targets for all utilities services 200K+ customers by 2032
Renewable Portfolio Standard (RPS) target:
100% by 2050
Path to go-live:
Day-in-the-life of an asset operator
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DA: 6-11
Review forecasts and submit Day-Ahead Energy and AS bids prior to the 11am bid close.
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DA: 13:30-14:15
Receive awards and participate in re-bidding, as needed, until the period ends at 14:15.
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DA: 18:30+
Submit revised offers up until 65 minutes prior to the operating hour. If self-scheduling, asset may not switch to ‘economic’ at this time.
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Operating Day
Submit real-time energy bids on an ongoing basis, as prices warrant to charge/dispatch the asset. ESRs and hybrid resources have maximum flexibility.
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