ERCOT is superior for speed-to-market (3-4 years) and raw energy costs ($35-45/MWh). PJM is superior for institutional-grade reliability and low-latency connectivity, though it faces severe queue congestion (2029+ timelines) and record-high capacity prices ($270/MW-day).
| Factor | PJM (Data Center Alley) | ERCOT (Texas) | Winner |
|---|---|---|---|
| Interconnection Queue | Severely Backlogged (2029+) | Congested but Moving (2028) | ERCOT |
| Power Cost (Energy) | $45-55 / MWh | $30-40 / MWh | ERCOT |
| Capacity/Reliability Cost | High ($269/MW-day) | Included in Volatility | ERCOT (Cost-wise) |
| Grid Reliability | High (Capacity Market) | Variable (Energy Only) | PJM |
| Clean Energy | Nuclear, Gas mix | Massive Wind/Solar | ERCOT (Renewables) |
| Network Ecosystem | Unrivaled (Ashburn) | Growing (Dallas) | PJM |
PJM's recent capacity auctions saw prices jump 800% to $269.92/MW-day. This adds roughly $10/MWh to the all-in power price for datacenters. This was driven by coal retirements and massive load growth from AI.
ERCOT is an "energy-only" market. Prices are usually low but can spike to $5,000/MWh during scarcity events. Datacenters can turn this into a profit center by participating in demand response (selling power back), but it requires operational flexibility.
PJM was overwhelmed by speculative solar projects. They instituted a "first-ready, first-served" reform, but are still processing a massive backlog. New large load applications submitted today likely won't energize before 2029.
Minimally. ERCOT is an electrical island, which exempts it from many FERC regulations but means it cannot import power during emergencies. This isolation increases reliability risk.
If cost and speed are paramount: ERCOT (West Texas or Dallas outskirts). If latency and ecosystem access are paramount: PJM (Ohio or Pennsylvania, avoiding crowded Loudoun County).
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