How Data Center Growth Will Shape Interconnection Processes + PJM RTEP Q3 2025 Update

The U.S. interconnection system was under strain long before data centers entered the picture. Now, the rapid growth of data center power demand is raising urgent questions about how large loads will be studied and integrated into the grid.

Power demand from AI workloads is predicted to increase fivefold by 2030— from 5 GW to over 50 GW (SPP, 2025). Overall, US electricity demand is predicted to increase 35-50% by 2040, with datacenter loads being the primary driver (American Clean Power, 2025). That scale of electric demand will test how ISOs and utilities manage load interconnection, a process with far less precedent, transparency, and standardization than generation interconnection.

Some grid operators are already responding. Earlier this month, the Southwest Power Pool approved a new policy for High Impact Large Loads (HILLs), including data centers and manufacturing facilities. The framework offers developers with a pathway to immediately connect large loads if they are willing to accept curtailable service over a 5-year period (CHILLS), as well as to connect large loads alongside supporting generation (HILLGA) (SPP, 2025). Reforms of this nature, which provide more efficient paths to interconnection for large loads projects, will be critical for ISOs and utilities to manage the onslaught of incoming load requests (peak load in SPP forecasted to nearly double in the next 10 years).

Why Load Interconnection Is Especially Challenging

1. Queue visibility is limited

For generation interconnection, ISOs publish queue data on a regular cadence. This gives developers visibility into which projects they are competing against and helps them assess the broader feasibility of interconnecting at a reasonable cost and timeline.

In contrast, load interconnection queues are not publicly available. Utilities are not required to disclose queued large load projects, making it difficult to know how much withdrawal capacity is already spoken for at a given Point of Interconnection (POI). Without this transparency, developers face significant uncertainty when evaluating the viability of siting new large loads.

2. Rapidly evolving grids

Transmission networks themselves are changing quickly, driven by a large and dynamic volume of both load and generation applications. This constant evolution leaves developers with limited certainty when evaluating which POIs have sufficient capacity to support their large load projects.

Grid operators are beginning to respond with new frameworks, but each is approaching the problem differently:

• Southwest Power Pool (SPP) has launched a new 90-day HILLs process to accelerate studies for large loads, as it prepares for peak load to nearly double in the next 10 years.

• PJM is developing a fast-track stakeholder process to create rules specifically for interconnecting data centers, with a proposal expected at FERC by year-end.

• ERCOT is working on rules that would require large data centers (≥75 MW) to participate in demand response programs, blending interconnection with operational flexibility.

  
  

What We’re Hearing in the Market

At Nira, our team's recent conversations with folks across the datacenter and energy industries underscore that, for both load developers and generation developers alike, having a strategy in mind for navigating large load interconnection is critical. At RE+, Nira spoke with developers exploring colocation strategies, siting new generation assets (both on-grid or off-grid) directly alongside large load projects to accelerate time to power. Meanwhile at Yotta 2025, we heard from numerous data center developers, many of whom are expanding their internal energy teams to deepen their power due diligence process.

The conversations we had in September reinforced that this space is still in its early days:

• Powered land strategies are gaining traction: Generation developers are exploring how to match their land that already has contracted power infrastructure with new data center demand, reducing project risks and accelerating time to power.

• Many are just getting started: Numerous data center developers we spoke with were preparing their very first load interconnection requests, underscoring how new this process is for much of the industry.

• Hyperscalers remain far ahead: Large technology companies continue to dominate prime siting opportunities, thanks to sophisticated diligence strategies and strong partnerships with key utilities.

The result is a widening gap: hyperscalers have visibility and speed, while most developers are still feeling their way into a process with limited transparency.

How Nira Is Addressing the Gap

In addition to the lack of public queue data, load interconnection is made even more complex by the fast pace at which queues are changing. An unprecedented influx of new load projects are entering queues nationwide. Simultaneously, many projects are dropping out after initially "dual-queuing" at multiple locations, creating a constantly shifting environment that's difficult to track and plan around.

To help developers navigate this uncertainty, Nira has developed a Local Studies tool that provides critical scenario analysis capabilities. Developers can test how much withdrawal capacity is available at specific locations under various conditions—whether a competitor sites new load nearby, their team adds co-located generation, or a planned transmission upgrade comes online.

Additionally, our local studies tool enables simultaneous evaluation of capacity at multiple POIs, accounting for the interdependent effects that siting two projects can have on available grid capacity. This approach gives developers confidence to make strategic decisions even in today's rapidly changing grid environment.

The industry knows what’s coming: data centers and other large loads will drive a historic share of demand growth over the next decade. What remains unknown is how interconnection processes will adapt.

September made clear that this conversation is only just beginning. From the colocation strategies we heard about at RE+ to the early-stage questions we heard from developers at Yotta, the market is actively searching for clarity.

That’s what Nira is building toward with local studies: helping customers move from uncertainty to confidence as load interconnection becomes the grid’s next great challenge.

PJM RTEP Q3 2025

PJM’s 2025 Regional Transmission Expansion Plan (RTEP) Window 1 is characterized by an unprecedented load growth and transmission buildout. The competitive solicitation window, which ran from June 18 to August 18, 2025, attracted 134 total proposals from 19 entities, with estimated costs ranging from $1.65 million to $6.73 billion.

The proposals focus on addressing reliability needs driven by unprecedented load increases (15-24 GW depending on season) and generation retirements, with particular emphasis on strengthening West-East and South-North transmission corridors through major backbone infrastructure investments.

Key Stats

• Proposals: 134 proposals submitted (57 greenfield projects, 77 upgrades) with 90 proposals including cost containment measures

• Load Growth: Net increases between 15-24 GW expected across different seasons and years, with the West region experiencing the highest growth (8.8-14.9 GW)

• Stakeholder Collaboration: 15 joint proposals submitted, showing unprecedented industry cooperation

• High-Voltage Focus: 29 proposals at 765 kV, 56 at 500 kV, 11 at 345 kV, and 15 at 230 kV levels, indicating need for major backbone reinforcement

Cost by Voltage Level:

• 765 kV: $54.65 billion (52%)

• 500 kV: $23.89 billion (23%)

• HVDC: $23.54 billion (22%)

• 345 kV: $1.54 billion (1.5%)

• 230 kV: $942 million

• 138 kV: $432 million

• 115 kV: $9 million

• 69 kV: $47 million

Technology Innovation: 5 HVDC proposals and 5 advanced conductor proposals included

Generator Retirement: Over 3.5 GW of generation set to retire

Key Takeaways

The scale of load growth - driven primarily by data centers - has contributed majorly to this iteration of PJM’s planning cycle, which clearly highlights fundamental changes to the architecture of the grid in contrast to merely incremental upgrades.

As PJM grapples with unprecedented load growth and contemplates $105 billion in transmission investments, having the right modeling assumptions has never been more critical. Nira Energy's platform reflects this evolving landscape, incorporating PJM's latest planning data to help developers navigate a rapidly transforming grid.