​PJM is clearing its queue as it prepares to implement a reformed interconnection process. Remaining queued projects fall into three groups: Fast Lane projects, Transition Cycle #1, and Transition Cycle #2.

While the two Transition Cycles are still undergoing preliminary interconnection studies, as of April 18, 2025, all eligible Fast Lane projects have received Interconnection Agreements. These Fast Lane projects offer an early view of PJM’s battery pipeline.

Key Points:

• Over 4 GW of nameplate battery capacity is likely to join PJM through 71 Fast Lane projects.
• Most prospective Fast Lane projects will begin commercial operations between 2027 and 2029.
• Independent power producers will deliver 95% of this capacity; utilities will add only 250 MW.
• Among prospective battery energy storage projects that disclosed their duration, 97% are four or more hours in duration.
• Energy arbitrage opportunities vary widely among the locations of these upcoming projects. The largest opportunities are in Virginia and Maryland and the smallest are in New Jersey.

The Fast Lane queue includes over 4 GW of battery projects

The Fast Lane is a temporary path for backlogged projects in the queue to bypass the first transition cycle program. It prioritizes projects that will require grid upgrade costs of less than $5 million, and keeps the time between initial interconnection study and receipt of an interconnection agreements to under 18 months.

Among the ~450 projects that completed PJM’s Fast Lane, 71 include a grid-scale battery energy storage system. Of these, 31 projects combine batteries with other resources (44%), while 40 projects use standalone storage (56%).

At the time of publication, three Fast Lane projects - totaling ~100 MW of nameplate battery capacity - had reached commercial operation.

Four more projects are actively under construction.

The remaining 64 projects, totaling over 4 GW of capacity, are in the engineering and procurement phase of project development. Many of these projects are still two to four years from commercial operation.

By the end of 2031, developers expect to have all Fast Lane projects online. Additional battery energy storage capacity will continue to become commercially operational through the Transition Cycles and the reformed interconnection process.

IPPs dominate the development of Fast Lane battery projects

The Fast Lane projects are largely being developed by independent power producers (IPPs). IPPs are planning to deliver 95% of new battery capacity.

RWE, Rev Renewables, EDF, and Jupiter Power each have portfolios of over 500 MW, together accounting for 54% of Fast Lane battery capacity.

Among utilities, Dominion is the only major developer. Its five projects, totaling 245 MW, make up 5% of Fast Lane battery capacity.

BGE was the only other utility to receive a Fast Lane interconnection agreement for a storage resource. Its single battery added 2.5 MW when it became commercially operational in September 2024.

Fast lane battery energy storage systems will almost exclusively be at least four hours in duration

Of the 38 projects for which duration data was available, 37 will have batteries with durations of four hours or longer.

This contrasts with ERCOT, for instance, where most batteries run for one to two hours. Only recently have four-hour systems become more attractive for generation owners in ERCOT.

The prevalence of 4+ hour systems reflects PJM’s market design. PJM’s capacity market accredits each participant’s resource adequacy value by assigning them an Effective Load Carrying Capability (ELCC), which measures a resource's estimated ability to contribute during a capacity event. Longer-duration batteries receive higher ELCCs, allowing them to offer more into capacity markets. To capture more capacity market revenue - especially with recent capacity auctions clearing at increasingly high prices - developers are incentivized to build longer-duration systems.

Of the 71 projects in the Fast Lane, 67 have been approved by PJM to participate in the capacity market and receive an award. The four excluded projects did not disclose their battery durations.

Energy arbitrage opportunities vary from $28,000/MW/Year to $104,000/MW/Year

As more batteries come online in PJM, Ancillary Service markets will begin to saturate, as already seen in CAISO and ERCOT. In turn, batteries will begin to rely on Energy arbitrage for a larger share of their merchant revenues.

Operators perform Energy arbitrage by charging a battery and buying energy when prices are low, and discharging when prices rise. The maximum potential intraday revenue is estimated using the top-bottom (TB) spread.

Because most Fast Lane batteries are four or more hours in duration, revenue opportunities for this cohort are best measured with the TB4 spread — the difference between the four highest and four lowest hourly prices.

Since Energy is priced locationally, unlike Ancillary Services, the node at which a battery is sited carries a much larger impact on its revenue potential once it begins to earn more from arbitrage.

Arbitrage opportunities for Fast Lane batteries vary widely. Scout Storage and RHC Solar had the highest revenue potential based on 2024 prices, more than $100,000/MW annually - though batteries rarely capture the full spread. By contrast, more than a third of projects had a maximum opportunity below $40,000/MW in 2024.

In 2025, increased instances of volatility meant that there were increased arbitrage opportunities at all of the prospective batteries’ proxy nodes. As a result, the average TB4 spread increased from $46,699/MW annually to $69,375/MW annually from 2024 to 2025 an increase of 49%.

Energy arbitrage opportunities are highly dependent on project locations

16 of the 20 sites with the highest 2024 TB4 spreads are in Northern Virginia and Eastern Maryland. By contrast, 16 of the 20 lowest-spread sites are in New Jersey.

In New Jersey, TB4 spreads are often lower because of limited transmission export capabilities. This limits the ability to export excess generation - relative to local demand - to the rest of PJM’s footprint. These export constraints often force curtailment during periods of the day in which prices peak. As a result, intraday volatility is restrained, which reduces arbitrage opportunities compared with other parts of the network.

In contrast, in Northern Virginia and Eastern Maryland, transmission congestion that results from high import requirements to serve concentrated demand from large load centers can drive sharp price swings.

Even with this disparity, batteries are being developed across all of PJM. Virginia and Maryland offer strong arbitrage upside and high capacity market clearing prices, but projects in New Jersey also see benefits such as the Garden State Energy Storage Program, which provides fixed payments per megawatt for 15 years.

In turn, the Fast Lane portfolio reflects how future projects will be built by a broader set of developers in new locations, pursuing more diverse revenue streams than the ancillary services that historically drove PJM battery returns.

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