For the first time in this century, electricity demand is projected to rise across the United States, in large part due to rapid data center expansion. Utilities, merchant generators, and developers are rushing to build new power generating capacity, including across the 13-state region of the Mid-Atlantic and the Midwest managed by the Pennsylvania-New Jersey-Maryland Interconnection (PJM) regional transmission organization. If PJM’s forecasts are accurate, total electricity demand could nearly double over the next 10 years.
Rapidly increasing demand poses a huge problem for Appalachia’s ongoing decarbonization efforts. By largely replacing coal with natural gas (also called fossil gas), 8 of the states in the PJM region have reduced the carbon intensity of their electricity from 0.75 metric tons carbon dioxide (mt CO2) per Megawatthour (MWh) electricity in 2003 to 0.43 mtCO2 per MWh in 2023, according to analysis of US Energy Information Administration data.
But since electricity produced by fossil gas emits 0.44 mt CO2 per MWh, further decarbonization will be functionally impossible without replacing fossil gas generation with more zero-carbon electricity. That would mean retiring existing fossil gas plants. But instead, PJM is prioritizing and fast-tracking more gas plants as a way to increase electricity supply to meet the projected rise in demand.
This piece explores the variations in demand growth and historic fuel composition across the PJM region. Overall, the regional grid in 2023 continues to be carbon intensive, with 70 percent of power generated from either natural gas or coal. Increasing electricity demand in the form of data center expansion will likely either encourage continued growth of gas generated electricity, or delay the retirement of coal plants. Neither option is good for regional decarbonization efforts.
Where is electricity load growth anticipated?
Appalachia is part of the PJM Interconnection, which spans a huge region home to tens of millions of Americans: all of Pennsylvania, Ohio, West Virginia, New Jersey, Delaware, Maryland, and the District of Columbia, almost all of Virginia, the eastern half of Kentucky, and parts of Illinois, Michigan, Indiana, and North Carolina.
This analysis focuses on the eight states outlined in the below map: Pennsylvania, Ohio, West Virginia, Kentucky, Virginia, Maryland, Delaware, and New Jersey.
Electricity generated in one part of PJM can be consumed locally or transmitted hundreds of miles away to be consumed in another state entirely. In 2023, PJM’s total electric load was 768 million MWh. PJM’s latest projections estimate total electric load will increase to a whopping 1.3 billion MWh by 2035, which is roughly 5% annual growth. By 2030, data center expansion could account for over 100 million MWh of the new electric load.
The extent of data center expansion is an open question, however, and recent analysis suggests that utilities are overestimating data center load growth by as much as 50% compared to the tech industry.
If PJM’s forecasts are accurate, the projected load growth will be unevenly distributed. A majority of the load growth is projected to take place across three utilities: Dominion, which powers populous eastern Virginia; American Electric Power, which powers much of central and southeast Ohio, part of eastern Kentucky and southern West Virginia, and western half of Virginia; and PPL Electric Utilities, which powers eastern Pennsylvania outside of Philadelphia. These three utilities are projected to grow roughly 10% annually from 2025 to 2032, which would double their electric load in less than a decade and result in a total electric load increase of about 300 million MWh. That is more than half of PJM’s total increase of about 500 million MWh between 2025 and 2035.
On the other hand, Allegheny Power Systems, which powers most of West Virginia, southwest Pennsylvania, and western Maryland, is projected to grow by up to 5% annually. PECO Energy, which powers Philadelphia, is projected to grow by no more than 2.5% annually. Similarly, Jersey Central Power and Light, which powers large swaths of New Jersey, is projected to grow by no more than 2% annually through 2030. Several of the smaller utilities have projected load growth of less than 1% per year.
Even these growth rates would be an aberration from the last 20 years of electricity consumption, as the analysis shows below.
The region overall produces more electricity than it consumes, but most of it is carbon intensive
Analysis of the last 20 years of EIA data shows that most of the electricity generated in the region has been and continues to be carbon intensive [1].
Electricity generation grew from 1990 to the mid-2000s. But from 2004 to 2023, annual electricity generation in the region has been largely stagnant, with a slight decline from the mid-2000s peak. The shift from coal (dark grey) to natural gas (light grey) as the dominant fuel source is the main story. In 2004, coal accounted for 67% of regional electricity generation while natural gas was just 5%. By 2023, this had almost flipped: natural gas accounted for 50% of electricity generation and coal just 20%. This flip resulted in a reduction in the carbon intensity of more than 40%, from 0.75 mt CO2 per MWh in 2003 to 0.43 mt CO2 per MWh in 2023.
Nuclear electricity generation (yellow) has been consistent throughout the last 20 years, at about 170 million MWh per year, or between 22% and 25% of total electricity generation. Pennsylvania accounts for 45% of the nuclear power generated across the eight states. The other 55% of nuclear power is generated in Ohio, Virginia, New Jersey, and Maryland.
Wind, solar, and hydroelectricity combined (green) make up a fraction of regional electricity generation. In 2004, they produced just 8.8 million MWh electricity, or just 1.5% of electricity generated. By 2023, this had increased to 18 million MWh, about 4% of the total.
Other sources of power (blue), like petroleum and wood, accounted for 4% of electricity generated in 2004, and have declined to 1.5% of electricity generated in 2023.
As a group, these states have consistently generated more electricity than they consumed, shown in the graph below.
However, almost all of the surplus electricity comes from Pennsylvania, which generated more than one third of the region’s combined generation in 2023. West Virginia was the only other state with a surplus of electricity generation. Ohio, New Jersey, and Kentucky consumption and generation were almost equal in 2023, while Virginia, Maryland, and Delaware consumed more electricity than they generated. Virginia in particular has seen electricity consumption rise in recent years, in large part due to data center expansion.
The coal to natural gas transition shifted generation from West Virginia and Kentucky toward Pennsylvania, Ohio, and Virginia.
Over the last 20 years, electricity production in Pennsylvania has transitioned from coal to natural gas. Coal accounted for 55 percent of electricity production in 2004 and just 5 percent in 2023. Natural gas grew from 5 percent of electricity production in 2004 to 60 percent in 2023. Nuclear energy accounts for 30 percent of Pennsylvania’s electricity production.
Ohio consumed 148 million MWh of electricity in 2023, more than Pennsylvania, yet it generated only 133 million MWh, mostly from natural gas. And while Pennsylvania’s electricity production has grown over the past 20 years, the decline of coal generation in Ohio has outpaced growth in fossil gas generation. Zero-carbon renewables have grown 10-fold since 2010, yet still only accounted for 4.8 million MWh in 2023.
Kentucky has generated roughly the same amount of electricity that it has consumed for the past 20 years. However, since 2019, the amount generated has been less than the amount consumed. Kentucky’s electric grid remains very dirty. In 2004, over 90% of Kentucky’s electricity came from coal. In 2023, coal still accounts for 68%, and natural gas accounts for 24%.
In West Virginia, coal is still king, with 86% of electricity generated from coal in 2023. However, West Virginia’s electricity generation has steadily declined over the past 20 years. From 2004 to 2008, West Virginia generated about 90 million MWh of electricity per year. In just 15 years, generation has declined 40% to 52 million MWh in 2023. And unlike in the other Appalachian states, natural gas generation has been slow to increase. Still, because West Virginia consumed only 32 million MWh in 2023, it remains a net electricity exporter.
Virginia produced more electricity in 2023 than in 2004 due to the growth in gas outpacing the decline in coal. In 2004, Virginia produced 36 million MWh of electricity from coal and 6 million MWh from gas. In 2023, Virginia produced 51 million MWh of electricity from gas and less than 2 million MWh from coal. Still, this increase of production has not kept up with increased consumption, particularly since 2020. Virginia consumed about 118 million MWh electricity per year from 2018 – 2020, and that jumped to over 130 million MWh by 2022. This is likely due to increased data center demand, which is projected to continue to grow.
New Jersey generates almost as much electricity as it consumes. In 2023, about half of New Jersey’s power came from nuclear, and the other half came from natural gas. The last year that coal provided any electricity in New Jersey was 2022, marking the end of a decades-long decline.
Maryland generates about 20 million MWh less electricity than it consumes. This is in part because Maryland’s increase in gas generation has not made up for its losses in coal. Nuclear and natural gas each accounted for about 40 percent of Maryland’s generation in 2023. Zero-carbon renewables accounted for 10 percent, and the remaining electricity was produced from coal and other fuels.
Delaware consumes very little electricity, yet generates even less. Natural gas accounts for over 90 percent of the total 4.7 million MWh of electricity produced in the state. This provides less than half of the 11 million MWh consumed in 2023.
[1] For this analysis, EIA data was analyzed for the 8 states that comprise the contiguous PJM region: Pennsylvania, Ohio, West Virginia, Kentucky, Virginia, New Jersey, Maryland, and Delaware. Only the eastern half of Kentucky is part of PJM, and this analysis excludes the parts of PJM in Illinois, Michigan, Indiana, and North Carolina.