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Watts Happening?
July 10, 2026
Market Update: PJM Power Markets Have a Problem…
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As we launch IL Battery Fund 1 LLC, we're excited to introduce Watts Happening?, our
bi-weekly market update highlighting key developments across power markets. Our analysis is based on public data and reflects our current views.
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PJM, the nation's largest power grid, just set a new all-time peak demand record. After taking 14 years to break the 2011 record, it took only one year to set another (evidence that electricity demand is accelerating!).
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- 162 GW: New all-time peak demand (2026)
- 160 GW: Previous record (2025)
- 67 million: Customers across 13 states
- 96%: Estimated effective system utilization
Demand growth is being driven by electrification and data centers, pushing the grid closer to its operating limits.
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Our analysis suggests PJM is now operating at roughly 96% of effective capacity well above a more comfortable planning level near 85%.
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For a system that underpins everyday life, "barely enough" isn't enough.
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Chart 1: New PJM Peak in 2026 after 2025 and 2011. 14 years to hit a new peak, 1 year to best it (source: PJM)
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Chart 2: The System is Running All-out Already (source: PJM)
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Battery storage solves a timing problem.
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- Peak demand consumes more than 95% of available generation.
- Earlier in the day, excess generation is often available.
On July 1, PJM experienced a 68 GW swing between low and peak demand. Batteries could have charged overnight and discharged during peak hours, reducing system stress without adding new generation.
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This isn't a new concern.
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PJM and independent analysts have warned since 2024 that reserve margins were tightening, with capacity increasingly challenged to keep pace with demand.
“Grid reliability is a growing concern in PJM. In a December 2024 letter, the PJM Board warned that PJM may face the threat of insufficient capacity to meet load as soon as June 2026.”
– Synapse Energy ‘The Next Decade in PJM’ Feb-2026
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Record demand is becoming less of an exception and more of a trend.
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As electricity demand continues to grow, battery storage will play an increasingly important role in maintaining grid reliability.
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