Six energy trends for 2026: Affordability, AI and abundance

If 2024 marked the pre-dawn of the AI boom and 2025 the sunrise, we are now fully in daylight.

Why it matters: This AI daylight will ripple through our midterm elections, your power bills and the future of all kinds of energy.

🔌 The "affordability" elections

Forget pump prices. The term du jour is "plug prices."

• The midterms could be the first in recent decades to render electricity prices a political liability through the broader "affordability" lens.
• Reasons for rising prices vary by region, but AI-driven data center growth is a factor in some areas.

Catch up fast: Politics tends to oversimplify, so expect this connection to be drawn bluntly on the campaign trail.

• Democrats are branding themselves as champions of "all of the above" energy — a slogan once more closely associated with Republicans.
• Republicans, meanwhile, are likely to be tied to President Trump's efforts to curb renewable energy, especially offshore wind.

Zoom in: Keep an eye on Georgia, where Democratic Sen. Jon Ossoff hopes to win another term, and open-seat Senate contests in Michigan and North Carolina.

What we're (also) watching: Whether Congress actually passes a permitting overhaul.

• Permitting delays and litigation are adding 20% to 25% additional cost on energy, said Drew Maloney, who leads the Edison Electric Institute, a trade group representing most of the country's utilities.

🌇 AI, full daylight

The daylight is intense.

"We're going to see a lot of stuff get turned on in the next six to 12 months," said Brian Janous, co-founder of data center project developer Cloverleaf Infrastructure and former vice president of energy at Microsoft.

• Janous argues that physical limits on energy infrastructure could keep a full-blown AI bubble from bursting.

What we're watching: Janous also predicts a lot of mergers and acquisitions this year across the energy and AI sectors.

• That consolidation could further reshape who controls — and pays for — scarce power.

🛢️ Abundance deepens for oil and gas

Trump's capture of Venezuela's leader is scrambling the debate around oil and geopolitics.

• But the longer term takeaway simply bolsters a trend already underway: The world has a lot of oil, which is good for prices at the pump but less so for producers.

What we're watching: If OPEC and allied producers — most notably Russia — resume output increases that were recently paused, the current oil market glut could worsen.

What's next: What goes down tends to (eventually) come back up.

• The deeper prices fall this year, "the more they will rebound in 2027 and 2028," predicts Jarand Rystad, founder and CEO of Rystad Energy, in a note to clients late last year.

↩️ Finding the "climate reset" button

Last year "broke the traditional climate agenda," as TIME put it. This year is about assembling something new.

• Whatever it is, it's likely to be intertwined with the affordability debate.

What they're saying: "We won't win because people are 'Oh, jeez, I got to pay more, but we got to do it for our grandkids,'" said Aliya Haq, a veteran environmental expert and president of a new group called CleanEcon, on a recent podcast.

• "They're going to do it because, 'This is going to be way cheaper for me.'"

Zoom out: We'll get a better understanding of China's ambitions to accelerate its clean energy and climate agenda in March when government leaders meet to discuss the nation's next five-year plan.

💨 Choose your own adventure, clean energy edition

Clean energy is far from monolithic, and 2026 will expose widening divergences.

• U.S. offshore wind's misadventures are likely to continue following Trump's 11th-hour 2025 move to pause leases.

Solar is also bracing for a slower year — potentially its weakest growth since the 2000s, according to Carlos Torres Diaz, Rystad's head of power.

• A shift in how China prices new projects, alongside U.S. headwinds, will be key drivers.

More nascent technologies are eyeing breakout moments. Geothermal startup Fervo is expected to pursue an IPO, a rare move in today's climate tech market.

• "We view 2026 as a scaling year," said Gabriel Kra, co-founder of Prelude Ventures, whose portfolio includes fusion and geothermal firms such as Fervo.

🌎 Trading climate tensions

The European Union's long-anticipated carbon border tax took effect Jan. 1, putting trade at the center of global climate action.

• "The future is going to lie in trade as the driver of low-emissions businesses," said David Goldwyn, president of Goldwyn Global Strategies.

What we're watching: Beyond the carbon border tax itself, expect renewed fights over European climate policies that ensnare U.S. companies, including climate disclosure.

Flashback: Every year since 2018, I've looked both back and ahead at the trends shaping the past year and the year to come, including a (sometimes humbling) reality check of what I had predicted at the year's start.

Cover photo: Brendan Lynch/Axios