PJM power jumps 75% as Playmobil quits Germany and heat pump sales climb 17%

The numbers arriving from opposite sides of the Atlantic tell the same story about energy and industrial geography. In the eastern United States, wholesale power prices in the PJM Interconnection market jumped 75.5% year on year in the first quarter of 2026. In Bavaria, the final shift at a Playmobil factory has already ended. In eleven European countries, residential heat pump sales rose 17% over the same quarter.

None of these figures is a projection. They are reported outcomes from the first three months of 2026, and together they sketch a year in which energy costs are deciding which factories run, which plants close, and what households install when gas and oil become unreliable.

Monitoring Analytics, the official market monitor for PJM, published the power price figures in its Q1 2026 state of the market report. The Register covered the report on 15 May 2026. The total cost per megawatt-hour of wholesale power rose from $77.78 in the first three months of 2025 to $136.53 in the same period this year. PJM serves all or parts of 13 states and the District of Columbia.

The monitor did not hedge. "Data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices," the report says. "But for data center growth, both actual and forecast, the capacity market would not have seen the same tight supply demand conditions."

Datacenter load and who pays

The watchdog's proposed remedy is blunt: datacenters should bring their own generation. It wants fast-track interconnection for so-called BYOP datacenters. Everyone else should wait in a queue that only connects them once adequate capacity exists. PJM, for its part, told The Register it is "working with states and member companies to address these consumer impacts on multiple fronts." It cited market caps introduced since the 2025/2026 auction, transmission expansion projects, and wholesale market rule reform. Monitoring Analytics did not respond to questions.

What makes the PJM case worth watching from Europe is the mechanism, not the megawatts. The monitor objects to a proposed one-time backstop auction because it would "generally shift significant risk to other PJM customers." The report says that temptation "should be resisted." It adds: "Other PJM customers, whether residential, commercial or industrial, should not be treated as a free source of insurance, or collateral, or financing for data centers."

That is a subsidy argument dressed as a market design argument. The report also warns the bill is already locked in. "The price impacts on customers have been very large and are not reversible," it states, adding that they "will be even larger in the near term unless the issues associated with data center load are addressed in a timely manner."

Political pressure is moving faster than the auctions. The backstop auction was requested by the Trump administration and the governors of PJM states. Public opinion is not aligned with the buildout. The Register cites a Gallup survey in which 71% of respondents opposed datacenter projects in their neighborhoods. It notes projects in multiple states have been abandoned after local pushback over electricity prices, noise, eyesores and environmental harm.

Playmobil: 350 jobs and an era

In Germany, the cost pressure has already produced a decision. Playmobil is ceasing all figure production in its home country and closing the Dietenhofen plant in Bavaria, according to Brussels Signal, which reported the closure on 24 June 2026. Around 350 jobs are affected at the site, which specialised in manufacturing the plastic figures. The final shift ended that week, with remaining employees on paid leave ahead of the official shutdown at the end of June.

The Horst Brandstätter Group, which owns the Playmobil brand, confirmed production is being consolidated at existing facilities in Malta and the Czech Republic. The company cited sharply rising production costs in Germany as the decisive factor, naming high energy prices alongside elevated wages and ancillary labour costs. Management said the cost environment had become unsustainable for labour-intensive plastic injection moulding. Administrative and logistical functions remain in Germany. The figures will not.

Brussels Signal notes that Germany's household electricity prices remain among the highest in the world, currently the fifth most expensive globally and the second highest among major industrial nations. It also points to the country's rapid shift away from nuclear and coal without sufficient baseload alternatives, combined with bureaucracy and wage pressures, as factors some economists describe as creeping deindustrialisation.

The symbolism is hard to miss. A toy long marketed as proudly "Made in Germany" will now be made entirely outside the country that created it. Unions called the move a "catastrophe" for the region, while business groups treated it as the latest example of a mid-sized enterprise relocating. Neither reaction changes the arithmetic that drove the decision.

Heat pumps: 575,000 units in one quarter

Households, unlike factories, can switch. Residential heat pump sales rose 17% year on year across 11 European countries in the first quarter of 2026, according to the European Heat Pump Association, as reported by pv magazine on 4 May 2026. Around 575,000 units were sold from January to March, up from 494,000 in the same period in 2025.

France, Germany and Poland averaged 25% growth over the quarter, with national experts citing rising energy prices and energy insecurity concerns. The association tied the surge to a sharp jump in gas and oil prices after Iran closed the Strait of Hormuz on 2 March 2026. The overall average was dragged down by Austria, where sales fell 30% because government subsidies were absent.

"If your streaming service doubled its price then blocked its movies you'd find a better one," said Paul Kenny, director general of the EHPA. "Consumers have realized heat pumps are the solution when gas and oil are erratic in price and supply."

Kenny said the European Commission has outlined steps to support heat pump adoption in its energy crisis plan, including VAT and tax reductions and social leasing schemes for lower-income households. He called on EU governments to implement these measures rapidly.

Read together, the three data points describe a squeeze with two exits. Industry that cannot relocate faces the full cost of power and gas, as Playmobil's Bavarian plant did. Industry that can move does, which is why production landed in Malta and the Czech Republic. Households, meanwhile, are being pushed toward electrification by price signals rather than by climate policy. That reverses the usual order of argument in European energy debates.

The PJM experience adds a third path that nobody is advertising: let other customers absorb the risk. Monitoring Analytics calls that a wealth transfer and says it should be resisted. Whether regulators in Virginia agree will be settled in auctions, not in reports.

One detail from the PJM report deserves attention because it is easy to skim past. Planned upgrades to the grid operator's power commitment and dispatch software have been delayed multiple times with no implementation date on the calendar. "The current supply of capacity in PJM is not adequate to meet the demand from large data center loads and will not be adequate in the foreseeable future," the monitor states.

That is the same conclusion German industry has been drawing about its own energy base, and the same one European households acted on this spring by buying heat pumps. The difference is that a grid operator can delay an upgrade. A factory cannot delay a closure once the final shift has ended.