E+E Leader Team
As companies prepare for 2026, infrastructure modernization is becoming a central part of operational and financial planning. Rising capacity costs, growing peak demand, and persistent reliability pressures across PJM are pushing organizations to reassess how they evaluate risk, flexibility, and long-term resilience.
A recent webinar featuring Nicolas Freschi of Gabel Associates, Steven Chambers of Constellation, and Nick Guay of GridBeyond provided high-level insights into these shifting market dynamics. Their analysis underscored how structural constraints are reshaping modernization strategies for the year ahead.
Capacity Scarcity Is Reshaping Planning
Nicolas Freschi highlighted the underlying system challenges creating volatility across the region.
“PJM has 35 gigawatts of coal power plants that are approaching the end of their mechanical life,” he noted, emphasizing that the grid is also “having a lot of trouble getting new power plants built.”
The result is a tightening supply environment:
“Right now, there’s just an extreme shortage of capacity.”
Freschi added that these pressures are likely to intensify, projecting that real capacity costs may rise significantly beginning in 2028.
Corporate Exposure Is Growing
Steven Chambers described how these dynamics are affecting customer budgets, noting,
“Capacity and transmission costs were going up, in some cases through the roof.”
The pace of these increases is prompting companies to scrutinize their infrastructure strategies, examining whether their current systems and planning models can withstand the next several years of market change.
Flexibility and Visibility Are Becoming Strategic
Nick Guay connected these system-level challenges directly to customer impacts:
“Capacity costs are translating to what everyone pays on their bills for their contribution towards the grid peaks each summer.”
With price uncertainty expected to continue, companies are evaluating flexibility measures, load management strategies, and modernization investments as tools to reduce exposure and improve reliability.
Key Themes for 2026 Modernization
- Infrastructure modernization is increasingly tied to resilience and risk mitigation.
- Internal visibility—load profiles, operational limits, and responsiveness—is essential.
- Flexibility is emerging as a core asset for navigating long-term market volatility.
- Companies should anticipate continued capacity tightness in the years ahead.
What Other Topic Were Discussed?
Below are just some of the questions the speaker’s addressed during the live event. They highlight the core issues energy leaders are focused on and offer a strong reason to watch the full on-demand session:
- “How do infrastructure investment and power supply dynamics within PJM impact large energy users?”
- “Are there any tangible shifts, in your view, that we should anticipate over the next few auction cycles?”
- “What role do you see AI playing in supporting the demand response program and simply managing peak load on your own?”
- “How does a program that eliminates revenue sharing and guarantees a minimum annual payout compare to what companies typically experience?”
- “If I’m an industrial site and I have to provide power reduction—what does that actually mean? What does it look like to open my company or plant to participate in demand response?”
- “We’re seeing more and more companies with batteries… How do you see the opportunity for battery storage adoption?”
These questions capture the complexity of today’s grid environment and highlight why energy, sustainability, and facility leaders are reevaluating modernization strategies heading into 2026.
Curious? Want to learn more? Watch the on-demand event, today.