The holiday spirit is in transition from gift giving to that of watching the ball drop when the clock strikes midnight on the east coast, symbolizing the calendar roll from the end of 2025 to the start of 2026. Over the past year, there has been a lot happening in the energy space and more lies ahead as Mother Nature is delivering the next round of colder temperatures to the Upper Midwest, Ohio Valley and Northeast.

Figure 1 | Holiday Transition from One Year to Another

In 2025, we saw policy changes occur under the new presidency with bills being passed early and often. Renewable technology continued to penetrate the supply stack capacity chain with solar technology being on the rise across California, Texas and parts of the Midwest. Battery technology followed as it is a natural fit for making the grid more reliable. CAISO and ERCOT are the two ISO’s that are managing the highest volume tied to the battery technology where both are seeing an impact on the thermal fleet during the ramp periods with the discharge is large enough to offset peaking natural gas units for most days.

Figure 2 | ERCOT Daily Battery Operations

On the demand side, the entire year’s conversation has been focused on data centers and the growth seen in the Northeast (PJM), South Central (ERCOT) and West (PNW). The growth story is just the tip of the iceberg given that the numbers being thrown around for the coming years are massive and disruptive at the same time as utilities and municipalities are scrambling to make sure their respective infrastructure can support such growth at a reasonable cost to the consumer.

Figure 3 | Demand – Data Centers and LNG

It is worth mentioning that the LNG fleet looks to continue with its growth plan as the current fleet capacity is north of 19.0 BCF/d with the likes of Golden Pass and other facilities in the works. Canada added LNG Canada to the conversation this year with Train 1 up and running in the middle of summer and Train 2 percolating here in December 2025. The current levels are showing the fleet pulling 18.4 BCF off the grid, which is around 4.5 BCF/d higher compared to December 2024. The majority of the volume is tied to the addition of Plaquemines.

As the storylines solidified, Mother Nature added the coldest start to the winter season east of the Rockies in early December. This was a reminder that the weather element underlies the structural changes mentioned above as demand numbers tied to heating and power burn consumption collide when temperatures plummet.  This led to a near term rally in the Nymex natural gas forward curve where the prompt month jumped up to $5.50 after trading as low as $3.80 a few weeks prior. It should be noted that the rally was on the heels of the colder weather mentioned in the East while the West and Texas were shielded from such weather. The former was the warmest start to a winter season over the past 13 years, and this month has delivered precipitation patterns that resulted in rainfall, not snowpack. This left the Pacific Northwest with massive flooding in early December while California felt the brunt of the weather and precipitation combination over the holidays.

At the end of the day, 2025 delivered a conversation piece that will serve as a foundation for what lies ahead in 2026.  Happy New Year everyone, be safe and enjoy the time off with family and friends.