If Demand Response has not made financial sense for your operations before, a recent change in PJM increases the value of flexible loads and might make it worth a second look.
Growing electricity demand from data center interconnection and electrification in PJM is associated with higher energy costs that businesses have to plan around, often with limited options to offset the increase.
PJM is now requiring large users, including data centers, to bring their own new capacity to support their electricity needs. They can do this through resources such as generators or by paying businesses already connected to the grid to reduce electricity use when needed.
What bring your own new capacity means
Capacity helps ensure that resources will be available when the grid needs them. Bring your own new capacity (BYONC) gives large new electricity users a way to secure that capacity from existing businesses. Those businesses can reduce the electricity they draw from the grid through load flexibility or resources such as batteries, natural gas generation, or fuel cells.
Why this is getting attention in PJM
As shown in Figure 1, recent PJM forecasts show substantially more demand growth than earlier projections. Capacity prices have risen, and new generation takes time to connect. Flexible demand can provide a resource while the market works through those longer-term supply challenges.
Figure 1: PJM summer peak demand forecasts by forecast year, PJM
On October 22, 2026, Voltus announced a deal to provide Google with one gigawatt of capacity through its Demand Response program in PJM. This arrangement would use demand reductions from participating businesses to help Google connect new data center load to PJM’s grid.
The potential value of that capacity is drawing attention. At PJM’s capacity price of $325 per megawatt per day, one megawatt is valued at $120,000 a year. With BYONC the current Demand Response offers are significantly above that market value, suggesting the value of flexible load has outpaced the $120,000/MW-year value established by PJM.
These figures describe potential resource value, not a guaranteed net payment to your business. What you could earn depends on eligibility, the agreement’s terms, and how much demand you can reliably reduce.
Which businesses should take a closer look
If your business has not participated in Demand Response during the past year, BYONC could be worth exploring. These opportunities focus on bringing new Demand Response capacity to the grid.
If you already participate in Demand Response, additional reductions beyond your previous participation could still qualify after individual review. Existing commitments cannot simply be moved into a BYONC arrangement.
PJM’s auction rules still apply, and businesses planning to use onsite generation will need to review any restrictions in their electricity supply contracts and emissions restrictions set out by their authority having jurisdiction (AHJ).
What to discuss with 5
Your facilities don’t have to be in PJM to explore Demand Response. While this BYONC opportunity is specific to PJM, 5 can help identify options in other regions.
5 can review your facility’s electricity use and Demand Response history with your team to identify how much demand you could reliably reduce. From there, we can help assess eligibility and potential payments under the agreement’s terms.
What could demand flexibility be worth to your business?
Connect with 5 to explore demand response opportunities, or start with a free Energy Physical to see how your facilities use energy and where opportunities may exist.
