Before 2023, PJM used a serial system to study interconnection requests on a first-come, first-served basis.

The system created a backlog, with some resources waiting over five years for approval. Withdrawals of speculative projects would trigger restudies and a surge of small-scale renewables intensified the buildup.

Key Points:

• From Backlog to Batches: PJM is replacing its serial “first-come, first-served” process with a cycle system. The new approach evaluates batches of projects that have all met initial interconnection requirements.
• The Storage Outlook: Transition-period projects will add 9–13 GW of battery energy storage by 2032, mainly in the DOM and AEP load zones.

The new interconnection process will cut down on wait times

Lengthening queue times in recent years aren't unique to PJM. In response to growing nationwide backlogs, the Federal Energy Regulatory Commission passed Order 2023, which requires all system operators under its jurisdiction to update their interconnection processes.

Accordingly, PJM has begun the implementation of a new interconnection process for all projects submitted after April 1st, 2018. They have also set the internal goal of keeping the time between application submission and interconnection approval under two years.

The new system applies a cluster-based approach, assessing projects in “cycles” based on readiness rather than submission date. Other features of the interconnection process have remained the same. For example, interconnecting resource must still pay for any network upgrades deemed necessary by PJM and the interconnecting utility.

Increasing requirements filter speculative projects out of the interconnection queue

To enter the process, projects must pay a deposit and prove generation site ownership before PJM accepts their application.

Once accepted, a project joins a batch of committed peers and moves through three phases and three decision points.

At each decision point, developers must provide new deposits and/or prove additional control of the project site. Developers meet the increasing thresholds for site control by providing proof of control of:

• 100% of the proposed generating facility land,
• 100% of the proposed generating facility land, and 50% of the proposed interconnection facility land,
• 100% of the proposed generating facility land, and 100% of the proposed interconnection facility land.

PJM uses deposits to fund the required studies and network upgrades. Over successive phases, deposits become non-refundable. If a developer withdraws their project, PJM pools their non-refundable deposits to offset underfunded network upgrades related to late-stage withdrawals.

Under the revised process, PJM seeks to cut delays and bring new generation online as quickly as possible. This is done by advancing committed projects through the queue and by processing resources in clusters rather than one by one. The goal is to ensure Resource Adequacy as demand grows and to shorten developers’ and investors’ time to revenue.

The transition period is clearing the interconnection queue before the full reform takes hold

PJM is in a transition period before full implementation, using it to clear the backlog and test the new process:

• Projects submitted for interconnection prior to April 1st, 2018, have continued through the serial process normally.
• Projects submitted between April 1st, 2018, and October 1st, 2020, have been divided into either Transition Cycle 1 (TC1) (the first trial of the reformed process) or an expedited “Fast Lane.” Only projects with grid upgrade costs of less than $5 million were moved to the Fast Lane.
• Projects submitted between October 1, 2020 and October 1, 2021 moved into Transition Cycle 2 (TC2). Additional projects entered this cycle through the Resource Reliability Initiative (a one-time program where PJM handpicked 51 projects that could come online quickly.)
• Projects submitted after October 1, 2021 had their applications withdrawn and must resubmit in the Cycle 1 application window.

Because the transition cycles overlap, PJM added checkpoints to prevent later cycles from needing to repeat phases. A cycle cannot begin:

• Phase 1 until the prior cycle closes Decision Point 2.
• Phase 2 until the prior cycle closes Decision Point 3.
• Phase 3 until the prior cycle executes or files its Generation Interconnection Agreements.

Phase 3 of TC1 also began only after the fast-lane process finished.

PJM is reviewing or has approved 18 GW of battery energy storage in the transition period

The current transition process reveals both how much generation capacity could come online in the coming years, and where it will be located.

PJM’s legacy queue and current cycle requests show storage projects forming a growing share of interconnection demand. 25% of capacity currently included in TC2 is from battery energy storage, up from 15% in the Fast Lane and TC1 evaluation groups.

The Dominion (DOM) and American Electric Power (AEP) load zones host 58% of this potential nameplate capacity from future battery energy storage projects.

The concentration of new projects in these load zones mirrors existing BESS trends in PJM, and reflects the rising demand shown in 2025 capacity auction results.

Still, these projections could shift as projects in both transition cycles may withdraw or be suspended. While Fast Lane projects have received interconnection agreements - and are thus near-certain to eventually reach commercial operations - projects in TC1 are nearing their final decision point, and projects in TC2 have yet to reach Decision Point 1.

The transition period will likely deliver between 9 and 13 GW of battery energy storage

Only about 20% of projects that enter US interconnection queues ultimately reach commercial operation. For this reason, estimates of future capacity additions need to account for queue attrition rates. For TC1, the adjustments are minor because the cycle has nearly completed Phase 3. However, many withdrawals and possible suspensions are likely to occur in TC2 before it closes.

TC2 outcomes can be approximated using completion rates from before the reform and from TC1. Before the reform, only 20% of submitted generation capacity completed the interconnection process. In TC1, 43% of submitted capacity remains in the process.

In addition to queue attrition rates, the timeline between receiving an interconnection agreement and beginning commercial operations is uncertain. Developers tend to be overly optimistic about when their projects will become operational.

The forecast below assumes a median of three years for a project to reach commercial operation, based off of BESS construction rates in other markets.

Based on current queue data, between 9 and 13 GW of battery energy storage capacity by rated power will likely join PJM’s network by 2032. The exact total will depend on how many TC2 participants withdraw, and the timeline will depend on the speed at which developers can reach commercial operations after progressing through PJM's initial interconnection study phases.

This forecast also only accounts for a segment of future BESS additions. It reflects the queues of the Fast Lane, TC1, and TC2, but other additions are likely in Cycle 1 and beyond. For this reason, forecasted capacity begins to level out at the end of 2032, six years after the final decision point of TC2. In reality, more projects will enter PJM's interconnection queue through the rest of the decade meaning the deployment of batteries will continue into the 2030s.