The unprecedented growth in power demand from the world’s largest data center hub in northern Virginia has made renewable energy contracts in PJM's Dominion Zone some of the most valuable in the nation. But with demand still accelerating, those sky-high values may just be getting started, offering a preview of PPA trends across the U.S.

Renewable contract values in the Dominion Zone have skyrocketed since late last year, at times clearing the $100/MWh barrier, according to Pexapark’s benchmarks. Solar PPAs in the hub now command a hefty 17.5% premium over the PJM composite value, up from a spread of 11.6% the same time last year. The composite benchmark consists of the Dominion Zone as well as the AEP Dayton, Eastern, and Western hubs.

The region’s unrelenting load growth could push PPA values in the Dominion Zone even higher. Peak summer demand there is now projected to reach over 33.4 GW in 2030. That figure represents an astounding upward revision of 12.2 GW, or about 57%, from PJM’s outlook just four years ago. Meanwhile, net energy use for the zone is projected to grow at an average annual rate of 8.4% for the next decade, the highest of any PJM hub, and far above the 4.8% growth rate for the PJM-wide market.  

The accelerated rise in power demand has PJM warning of a supply-demand imbalance. This prompted the market operator to kick off a new initiative in August to shore up generating capacity.

“The Board desires development of reliability-focused solutions to ensure large loads can continue to be integrated rapidly and reliably, without causing resource inadequacy,” David Mills, chair of the PJM Board of Managers, said in an Aug. 12 letter to PJM stakeholders.

PJM plans to submit its proposal to FERC by the end of the year, allowing the new rules to take effect in advance of the capacity auction for the 2028/2029 Delivery Year.

As data centers proliferate across the country, valuations in the Dominion Zone could offer clues into how prices may trend elsewhere.