The 86% That Never Energize

The failure rate is already priced into the survivors.

14% of queued capacity in U.S. interconnection queues historically reaches commercial operation. That means 86% doesn’t. Not “gets delayed.” Doesn’t happen. Ever.

And that failure rate isn’t sitting quietly on the sidelines anymore, it’s getting priced directly into the survivors. PJM’s capacity auction moved from $28.92 per megawatt-day to $329.17 in a single cycle, and that jump is what 86% of queued capacity quietly withdrawing looks like once a market starts pricing scarcity correctly.

Here’s the part that should change how you read your own portfolio. The projects that survive interconnection aren’t just lucky. They’re capturing value that the 86% who didn’t survive would have competed away if they’d made it to the finish line. Every dead project in the queue is, in a strange way, a subsidy to the ones that clear.

If you’re allocating capital into this sector right now and you can’t tell me what percentage of your portfolio’s underlying capacity has actually cleared interconnection, as opposed to being “on track” or “in process,” you don’t know what you own. You know what a sponsor told you that you own, which is a different thing entirely, and the gap between those two things is exactly 86 points wide.

Your LPs are going to ask about AI infrastructure exposure this quarter, this year, or next. “It’s in the fund” stops being an answer the moment the LP has read a piece like this one. “It cleared interconnection” is the only answer left standing.

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