Why Energy Prices in 2027 Are Lower Than 2025 and 2026

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.

Power Market: Why 2027 Futures Are Lower

• 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.

Natural Gas Market: What’s Driving Lower 2027 Prices

• 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.

What This Tells Us

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.

Key Takeaway

Forward curves currently price 2027 electricity and natural gas below 2025 and 2026 levels, driven by expected renewable capacity growth, retiring high-cost power plants and rising LNG export and domestic gas supply. This is a snapshot of how the market prices future risk today, not a guarantee of what 2027 will actually cost, so it's worth confirming against current curve data before using it to time a contract decision.