What the forward curves are telling us about power and natural gas markets
Energy markets are always moving—and right now, there’s a clear trend: prices for 2027 are lower than 2025 and 2026 for both electricity and natural gas.
This doesn’t necessarily mean 2027 is the “best” year to buy—it simply reflects how the market is currently pricing the future based on expected supply, demand, and other market forces.
Here’s a quick look at why this is happening.
More Renewable Energy Coming Online
By 2027, a lot of new wind and solar projects are expected to be up and running. These low-cost energy sources add supply and help bring overall prices down.
Old, Expensive Plants Are Retiring
Aging coal and gas plants that are expensive to run are being shut down before 2027. That reduces the cost of producing power across the system.
Natural Gas Prices Are Lower in 2027
Since natural gas is a key input for electricity generation, lower gas prices in 2027 help pull down power prices as well.
Less Trading Activity Further Out
There’s less trading and liquidity in the market for 2027, which can lead to softer or more discounted prices compared to near-term years.
More Supply Expected
After 2026, new LNG export facilities and more domestic production are expected to boost supply—outpacing demand growth.
Slower Demand Growth
Energy efficiency improvements and the growing role of renewables are slowing down the long-term need for natural gas.
A More Balanced Global Market
The global LNG market is expected to stabilize after 2026, reducing price pressure from international demand.
Technical Factors
Like the power market, there’s less trading activity further out on the gas curve, which can make longer-term prices appear lower.
The market is currently pricing 2027 as a lower-cost year compared to 2025 and 2026. That’s being driven by expectations of more supply, changes in demand, and market mechanics.
It’s not a prediction—it’s a reflection of how the market sees future risks and opportunities today.
For businesses thinking long-term, these trends are important to keep in mind when planning your energy strategy, evaluating multi-year contracts, or exploring cost-averaging opportunities.
Want help understanding how this applies to your business? Reach out—we’ll walk you through it.