Electricity Market Outlook
2025–2030

Why a Long-Term Strategy is Crucial Now

Volatile market drivers are creating sustained upside risk for electricity prices. Securing a long-term plan mitigates your exposure to:

• LNG Export-Driven Price Spikes: Increasing global demand for natural gas is directly impacting domestic prices.
• Regional Capacity Constraints: The retirement of older power plants is outpacing new, reliable generation.
• Unprecedented Demand Growth: AI, data centers, and electrification are creating new, 24/7 demand on the grid.

LNG Surge is Reshaping Domestic Gas Prices

• Export Capacity is Surging: U.S. LNG export capacity is set to double 2022 levels by 2026, with major new terminals coming online.
• Global Price Link: Domestic natural gas is now increasingly tied to higher global price points.
• Higher Price Floor: The net effect is a rising floor for natural gas prices, which directly correlates with higher power prices.

The Generation and Interconnection Challenge

Our regional grid, PJM, is facing a critical reality:

• Renewable-Heavy Queue: Over 95% of proposed new capacity is from intermittent sources like solar, wind, and batteries.
• Baseload Retirements: Reliable power plants are retiring far faster than they are being replaced.
• Severe Bottlenecks: Building new firm generation is severely bottlenecked by lead times, backlogs, and permitting.

Data Centers & Electrification Are Driving a Demand Supercycle

• Massive New Load: AI and hyperscale data centers are expanding rapidly, with sites often requiring over 100 MW of 24/7 power.
• System-Wide Growth: This has caused PJM to revise its long-term forecast upward by approximately 9%.
• Intensifying Peak Load: The electrification of industrial processes and vehicle fleets further intensifies demand.

Rising Costs & Risks for Renewable Buildout

While essential, the transition to renewables is facing significant challenges:

• Supply Chain & Tariffs: Tariffs on key components like solar panels are increasing capital costs by over 20%.
• Grid Connection Costs: The cost to connect new projects to the grid is skyrocketing.
• Intermittency Issues: Renewable builds do not resolve peak hour supply challenges without reliable backup power.

Summary: Navigating a High-Risk Energy Decade

The period from 2025 to 2030 presents a high-risk environment for energy procurement:

• Supply at Risk: Regional capacity is tightening.
• Globalized Volatility: LNG exports tie our prices to global events.
• Demand is Surging: Data centers and electrification are creating historic demand growth.
• Renewable Gaps: Renewables are not enough to cover retirements of firm generation.

Our Strategic Recommendation: We strongly advise securing a long-term electricity supply strategy now to lock in stability.