Supply-side stress: power and diesel signals

PJM Interconnection is scrambling to line up 15 gigawatts of new power as data-center demand outruns the grid’s existing supply plan. (bloomberg.com) PJM runs the bulk-power system for more than 67 million people across 13 states and the District of Columbia. In its 2025 long-term load forecast, it projected peak demand growth of 32 gigawatts from 2024 to 2030, with about 30 gigawatts tied to data centers. (pjm.com) The pressure is already showing up in PJM’s capacity market, which pays generators for being available in future years. A recent auction procured 145,777 megawatts for the 2027-2028 delivery year and still fell 6,625 megawatts short of the reliability requirement, according to a summary cited by Negotiatethefuture.org. (negotiatethefuture.org) Diesel is the other constraint because it is the fuel that moves most freight, farm equipment and backup generators. The United States Energy Information Administration said lower distillate inventories raise the risk of price spikes and supply disruptions during the autumn harvest and winter heating season. (eia.gov) That warning covers more than trucking fuel. Distillate includes diesel and heating oil, and the Energy Information Administration said U.S. total distillate inventories dropped 17% in the first half of 2025, or about 22 million barrels, a steeper draw than the average decline in the prior four years. (eia.gov) Global supply has also tightened because the Gulf is a major export hub for diesel and other middle distillates, the fuels that sit in the middle of the barrel between gasoline and heavy fuel oil. The International Energy Agency said Gulf producers exported 3.3 million barrels a day of refined products in 2025 and that more than 3 million barrels a day of refining capacity in the region had already shut because of attacks and blocked export routes. (iea.org) Analysts at Kpler said on April 3 that Middle East disruptions were pushing refiners to maximize diesel and jet output, but that operational limits were capping how much extra supply they could add. Kpler said the Middle East accounts for roughly 15% of global seaborne middle-distillate exports. (kpler.com) PJM and diesel markets are separate systems, but both are being asked to absorb new loads with little slack. In PJM, the new load is artificial-intelligence computing; in fuel markets, it is freight, agriculture, heating and backup power competing for the same distillate pool. (pjm.com) (eia.gov) State officials are now pressing PJM to contain the cost of that power squeeze. Maryland Governor Wes Moore said on April 9 that a coalition of governors in the PJM region had asked for urgent action to protect households and businesses from rising electricity costs tied to data-center growth. (maryland.gov) The common thread is not a single shortage today, but a thinner margin for error in two basic inputs: electricity and diesel. When reserve power and transport fuel both get tighter, supply chains have less room to absorb the next heat wave, refinery outage, harvest surge or demand jump. (bloomberg.com) (eia.gov)