The Coming Power Shakeout: Knowledge Facilities, LNG, ESG, and What Breaks in 2026

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Because it’s the beginning of a brand new yr, Redefining Power’s annual predictions present has dropped. Yearly Laurent Segalen, Gerard Reid, and I assess one another’s predictions about international power and decarbonization occasions and milestones from the earlier yr, scoring them and proclaiming a winner. Yearly, we make extra predictions. Learn or hear, as you like.

Laurent Segalen [LS]: Pleased New 12 months.

Michael Barnard [MB]: Pleased New 12 months to the each of you. It’s going to be an superior yr. There’s going to be a lot attention-grabbing stuff taking place in 2026 that’s constructive.

Gerard Reid [GR]: I agree completely with you, Michael. I agree completely. It’s going to be a loopy yr.

[LS]: However first, gents, earlier than speaking concerning the new yr, we have to revisit the predictions we made a yr in the past. Let me remind our listeners of our six predictions. Michael stated that oil manufacturing could be down within the US in 2025. Gerard stated oil costs would hit $40 per barrel in 2025.

[GR]: Can I right you there? I stated $50.

[LS]: No, no, you stated $40.

[GR]: I didn’t. You couldn’t perceive my accent, Laurent. I imply, sorry, I. 50 is what I stated.

[MB]: Sadly, the report is in opposition to you on this one, Gerard.

[LS]: Fifty, beginning with a 4. Third one: geopolitics, stress, provide chains, and an power bonanza will carry a extra modern and higher world. That’s me. That’s a Gerard-style prediction.

Quantity 4, Michael: a massacre for hydrogen within the transportation sector.

Quantity 5: report installations of photo voltaic at 700 gigawatts, EVs at 20 million, and batteries at 200 gigawatt-hours, from Gerard.

And eventually, from me, quantity six: the tip of all monetary merchandise labeled ESG, local weather, and carbon.
Let’s begin with primary, Michael.

[MB]: I failed. I’m off by about eight months. Oil costs and oil demand had been buoyed as a result of China has large reserves and saved shopping for oil far previous the purpose of consumption. Although precise diesel and gasoline demand are down in China, their petrochemical business has gone up a bit. So their precise oil consumption is comparatively flat.
However their reserves replicate a view that the geopolitics advantage having vital запас—vital reserves. That saved demand up, which saved costs up.

That led to the second level, which is that shale wells in america did get finalized. However drilling rigs in america are manner down. They’re not finishing almost as many wells. China’s reserve buildup must be full in some unspecified time in the future.

I’m not making this one among my predictions, however I’m off by months. It didn’t occur this yr.

[GR]: And by the best way, constructing on that, my level about $40 oil pertains to the identical factor. On the finish of the day, demand was stronger than we anticipated. However I might additionally agree with Michael and say that within the coming yr we are going to see costs transfer down towards $40.

[LS]: The worth of oil has gone from, say, $80 to $60. That’s loads. However let’s price it. Michael, I provide you with a 2 out of 10. Gerard…

[GR]: Oh, I give Michael 5 out of 10. It was simply the timing was barely out.

[MB]: That’s very beneficiant of you, Gerard. Thanks.

[GR]: It’s 2026. It’s going to be an important yr.

[MB]: I might have given myself a 3 out of ten. So a two and a 5. I’m within the vary. I’m proud of that.

[GR]: However I do wish to say one factor: Mike gave an important rationalization. The geopolitics of power are what actually made 2025 advanced.

[LS]: Gerard, your prediction was quite simple, and you bought it flawed. So I provide you with a zero as a result of it was very binary. You get a zero out of ten. Mike, what do you give Gerard?

[MB]: I’m simply going to say that my prediction was binary as nicely, and also you had been extra beneficiant to me. I’m going to present Gerard a 3 on that. As he stated, it acquired all the way down to 50. It was decrease than any of the oil boffins thought it was going to be. It was a nasty yr for oil.

[GR]: Agreed.

[LS]: My prediction was imprecise, so it was a Gerard type. The successful technique was that geopolitics, stress, provide chains, and an power bonanza would carry a extra modern and higher world. A greater world, I don’t know.

However what I do know is that the stress on the grids has pushed progress. We’ve seen advances in transformers, advances in digitization, and unbelievable improvement of batteries. We even noticed gasoline cells evolve. Should you take a look at an organization like Bloom Power, they’re now not doing gasoline cells for hydrogen, however for fuel. We’ve seen advances in grid research with AI corporations like Tapestry. We’ve superior geothermal and quite a lot of work performed on flexibility.

So for me, geopolitics and rising power demand have pushed innovation ahead.

[MB]: Gents, my take is barely totally different. I’m not disagreeing with you, besides on Bloom Power, which has at all times been a pure fuel gasoline cell firm with very doubtful environmental claims. It tried to experience the hydrogen hype and didn’t do a lot there. Now it’s using the info middle hype, but it surely’s nonetheless only a strong oxide gasoline cell operating on methane.

That stated, the geopolitics have been very attention-grabbing. Pakistan is looking for a brand new dwelling for twenty-four LNG ships’ value of long-term LNG purchases from Qatar. That’s seismic. These long-term contracts had been presupposed to buoy LNG, but Pakistan is saying no due to the 17 gigawatts of rooftop photo voltaic it has put in.

Equally, within the first six months of this yr, India and China dropped LNG imports by double digits. That coincided with India slicing gas-fired era by 34% yr over yr.

The world is altering tremendously for the higher due to low cost photo voltaic and batteries. I see proof of this globally. The LNG business will not be prepared for it. It’s going to be a massacre within the LNG business, which isn’t my prediction, however it’s the actuality.

[GR]: Let me speak concerning the wording of your prediction. You stated geopolitics, stress, provide chains, and an power bonanza will carry a extra modern and higher world.

Let’s begin with pressured provide chains. I don’t see pressured provide chains. I see oversupply of virtually every thing within the power house, whether or not it’s oil, fuel, coal, or electrical energy. We’re swimming in electrical energy in Europe. There’s an excessive amount of photo voltaic, an excessive amount of battery, an excessive amount of wind.

I take the purpose a few extra modern and higher world, however I don’t learn about that. What’s extra modern than final yr? I don’t actually see any large improvements during the last 12 months. There’s little question the world is a greater place, and the Pakistan instance is an effective one.

As a result of it was so imprecise, I’m going to present you a 5 out of ten.

[LS]: What about you, Michael?

[MB]: I believe Gerard is being beneficiant, given how imprecise the declare was. I pushed again fairly onerous on that time. Predictions are solely helpful if they’re testable and quantifiable. If they don’t seem to be, they’re nearer to narrative than evaluation. I attempt to be constant about that normal, together with when it’s uncomfortable. On that foundation, I can not justify a better rating. I’m giving it a 4.

Which provides you the very best rating within the first spherical of predictions out of the three of us, as a result of I failed fully on mine and Gerard failed fully on his. Generously, you each gave me greater than zero, which I assumed was very good of you.

[LS]: The fourth one, Michael, you nailed it: a massacre for the hydrogen transportation sector. Do you may have a couple of examples?

[MB]: Oh my God. It has simply been schadenfreude metropolis. Right here in Vancouver, my schadenfreude cup has been overflowing. I’ve been speaking about hydrogen and transportation, publishing and analyzing it, for over a decade. This yr, all of the goals got here tumbling down.

Let’s begin with one of many huge ones: heavy trucking. The declare was at all times that batteries weren’t going to chop it for heavy vans within the freight business. Besides in China, which really ran the experiment with hydrogen versus battery electrical. Within the first 9 months of this yr, they offered 90,000 battery-electric heavy vans. In the meantime, the variety of hydrogen vans collapsed, going from the low 1000’s to even decrease 1000’s, down by one thing like 40%. That’s information level one.

Globally, we’re seeing battery-electric vans being delivered, not hydrogen vans.

Equally, gasoline cell automobiles have basically disappeared. Alstom is now out of the hydrogen prepare enterprise. They stated they’re closing down that division. If clients nonetheless need the hydrogen trains they already ordered, Alstom will ship them, however they’re clearly signaling that clients shouldn’t even preserve them and will take battery-electric as a substitute.

Wanting throughout the info extra broadly, I monitor a listing of 171 corporations and organizations that had been energetic in hydrogen transportation. This yr, 36% have formally dropped hydrogen or pivoted away from it. And that 36% considerably understates the fact, as a result of my normal is excessive. They should explicitly say they’re dropping hydrogen, not simply quietly slink away. I believe the actual quantity is nicely over 50%.

Airbus dropped its hydrogen aviation program. Stellantis dropped hydrogen vans. Plug Energy and FuelCell Power are fighting reverse inventory splits simply to remain listed. They’re slicing upkeep at their hydrogen crops, which is harmful.

It’s actually ugly in hydrogen transportation proper now. And, as I stated, I’m having fun with each minute of it.

[LS]: Michael, nicely performed. So I provide you with eight out of 10.

[GR]: I provide you with a 9 since you’ve been calling it for fairly some time. Properly performed. Nice job.

[MB]: I’m questioning how far more of a massacre would you like? What would trigger it to not be a ten?

[LS]: Primarily based on what I’ve shared, it’s quite simple. I’ve quantitative standards, and I believe your reply was a bit imprecise.
Job quantity 5. Now, Gerard, on that one, he gave numbers, and the numbers had been fairly good.

[GR]: I used to be put beneath strain, so I stated 700 gigawatts of photo voltaic. Wanting again, we don’t actually have the total numbers but, however I believe they had been near that, possibly round 680. EVs at 20 million.

We’re all possibly just a little bit above that, and positively batteries too. I stated round 200 gigawatt-hours, and I believe it’s in all probability even greater than that.

So I believe I did fairly nicely on my numbers.

[LS]: Nevertheless it was an excellent trick in your facet, as a result of first you stated 200 gigawatts and then you definately stated hours. In actual fact, as a result of all of the batteries are 4 hours. Properly performed. Properly performed on this one.

[GR]: And report numbers, proper? They actually had been. It’s superb what’s gone on.

[LS]: All proper, so on this one, you deserve a ten out of 10.

[MB]: I’m supplying you with a ten out of 10 as nicely. We’ll reward you for predicting the bleedingly apparent. You picked numbers, you had been exact, and also you had three totally different numbers. And sure, 2025 has been an incredible yr.

[LS]: The final prediction from final yr was mine: the tip of all monetary merchandise labeled ESG, local weather, and carbon. If I take a look at the variety of funds that had been named local weather or ESG, about 25% have been rebranded from sustainable to transition. Within the US, there have been 12 consecutive quarters of outflows.

It comes all the way down to decarbonization versus electrification. Every little thing that falls beneath decarbonization writ giant, and I’m speaking about carbon seize and hydrogen, is simply burning cash, typically solely to be bailed out by taxpayers, and possibly much less and fewer going ahead.

In contrast, electrification funds are doing nice as a result of, as I’ve at all times stated, switching fuels makes extra sense than fixing fuels. Gents.

[GR]: Nice speech, Laurent, however I’m about information. I simply go into Google and kind “ESG investing,” and what comes up is PIMCO. So I am going into PIMCO and look, and there’s the PIMCO Local weather Bond Fund, International Funding Grade Credit score, ESG fund, and so forth.

So there’s no finish. Finish means it’s completed. It’s nonetheless right here. That’s the fact. There’s no manner you’re getting good marks from me.

[MB]: You bought the path of journey proper, however like oil for Gerard and me, you missed the timing. You had been far too aggressive on timing. Sure, they’re down, however 25% is lower than 36%.

From a quantification perspective, you actually aren’t getting an ideal rating. I’d give it a 5 out of 10. You had been proper {that a} bunch of them dropped and quite a lot of modifications occurred in that house, but it surely wasn’t a massacre in ESG and local weather funds in the identical manner.

[GR]: Yeah, I’ll provide you with 4.

[LS]: So I recount as ordinary. I’m final. And we now have a winner. Once more, it’s Michael.

[MB]: I used to be anticipating to not be the winner this yr as a result of I missed one actually badly.

[LS]: You bought the hydrogen one fairly good.

And Gerard, the primary one was such a catastrophe. That was solved, but it surely wasn’t sufficient to meet up with Michael. In order ordinary, the winner is Michael. Properly performed, Michael.

[MB]: I’d identical to to say that my uncle Nostradamus is rolling over in his grave. I used to be far too exact and testable in my predictions.

[LS]: There have been two further predictions we made alongside the best way. The primary was that we thought BP wouldn’t survive to 2025. They did, so good for them.

[GR]: Yeah, they did.

[LS]: The opposite one was a prediction Gerard made 15 months in the past on the value of silver. He was very bullish on silver when it was at $30, and now it’s at $60. This one is for Gerard. Properly performed.

[GR]: We acquired one proper.

[LS]: That’s good. Gents, it’s time to maneuver to our predictions for 2026. Who desires to go first?

[MB]: I’ll go first this time. My first prediction is that in China we’re going to see battery storage auctions at $40 per kilowatt-hour for grid-scale battery power storage techniques, with 20-year contracts maintained and deployed. We had been at $65 final December, which was astounding. I believe we’re going to hit $40 this yr.

[GR]: Can I ask you a query, Michael?

[MB]: Positive.

[GR]: What expertise Is it lithium ion or is it sodium ion or what’s your view?

[MB]: LFP. The Naxtra sodium ion batteries that CATL is bringing in are promising, however they’re additionally economically closely challenged by LFP being filth low cost and having a lot of the benefits.

[LS]: What’s unbelievable is the brand new kind components which can be arriving. All people used to work with 314 amp-hour cells, and now it’s 587. We’re even seeing cells above 1,000 amp-hours. The larger the cells, the decrease the price of the system.

[GR]: It has large ramifications, doesn’t it? Should you simply take into consideration photo voltaic and batteries collectively, the costs are loopy.

[MB]: And it’s not simply the cells, Laurent. My evaluation, which was flawed and trite and based mostly on first ideas, was that it might be the identical as what we see with hydrogen electrolysis crops, the place the stability of plant doesn’t get cheaper as a result of it’s commoditized. That was true for battery power storage techniques for some time.

However in China, with LFP, they assemble the cells, put them in a rack, slap a bus on high with aluminum conductors which can be filth low cost and straightforward to assemble, shrink-wrap them, put them in a field, and drop the field in a subject. It’s an insanely mild stability of plant. They’re nonetheless innovating throughout the whole system. There’s nonetheless juice to be squeezed out of that lemon.

[LS]: Good job. I’ll go second, and naturally I’m going to speak about information facilities. Knowledge facilities and the brand new Panic of 1873. We’re going to see a big purge. Folks discuss a bubble, particularly on the finish of final yr, and there was some extraordinarily unhealthy conduct.

You could have startups borrowing cash to construct information facilities for different startups. Each are dropping great quantities of money, but by some means they’re nonetheless capable of elevate debt capital to fund these buildouts, with out clients or any visibility into whether or not these investments will repay.

I predict that, like final decade with Adam Neumann at WeWork, this decade’s equal is Sam Altman at OpenAI, however at a a lot bigger order of magnitude.

Google and Microsoft are going to be okay. However on the periphery, there are a variety of corporations, and I even ponder whether we must always embrace Oracle in that group. Blue Owl, CoreWeave. Every little thing is constructed on credit score.

Should you take a look at CDS, and I say this as somebody who was at Lehman 20 years in the past when everybody knew what a credit score default swap was, folks appear to have forgotten since then. Over the previous three months, CDS have began arising in dialog once more. The CDS spreads of these peripheral corporations appear to be Egypt, Ethiopia, or Sri Lanka.

It’s all nicely and wonderful, Gerard, to level to PIMCO. However at PIMCO, they’ve put out $28 billion of credit score.

[GR]: So might you give us one line, please, so we are able to really quantify it and see whether or not you’re proper or flawed?

[LS]: Okay, 50% of the info facilities introduced won’t ever be constructed.

[MB]: That’s remarkably low. However I’ll take 50%. That’s a simple goal to hit. I agree. I’ve specced information facilities in my skilled profession. I’ve even put masses in information facilities. The primary time within the 80s I put masses within the clouds and cloud based mostly information facilities. And I’ve been doing AI professionally on and off for 15 years together with in one among my present corporations. And I’ve been a efficiency engineer on main software program applications. So I do know three guidelines for software program. First, by no means optimize early. Simply assume you’ll have the ability to throw {hardware} at it as a result of that’ll be the most affordable repair. Second, you probably have a efficiency downside, throw {hardware} at it as a result of that’s the most affordable repair. Third, if you happen to can’t repair it with low cost {hardware}, then get clever folks to optimize it. And that’s what Deepseek did this yr.

Deepseek had clever folks, they optimized the software program, they acquired superb outcomes with again stage chips in a fraction of the coaching and processing time they usually’re promoting that mannequin globally. Numerous the innovation in stuff is scripting that isn’t utilizing the big language fashions. So I do know the demand bubble is gone. Now I’d like to speak about just a bit bit concerning the corollaries, the implications of that. After I analyzed the AI spike, what I discovered was that overwhelming majority of the info middle construct out is in america. All the inventory positive factors of the US inventory market have been within the seven huge tech corporations. We’re constructing large information facilities. Every little thing else is flat or declining. America is in structural recession apart from the AI information middle construct. In order that’s type of financial indicator one.

Financial indicator two is that the highest 10% of earnings earners are spending 50% of the buyer spending. They’re spending that as a result of their 401ks are good due to this information middle factor. They’ve acquired index funds which can be over invested in these information facilities. There’s a bloodshed coming. This isn’t my prediction, however there’s bloodshed coming within the American financial system subsequent yr as these financial indicators collide and the highest 10% cease spending.

[GR]: I believe you’re each flawed. Oh, I believe it’ll be 2027, not 2026. You bought your timing flawed.

[LS]: Gerard, you’re going to have to elucidate this to me. Texas has acquired 226 gigawatts of requests for brand new information facilities, and the height load is 85.

[GR]: No, on what you stated about information facilities, I agree. They’re not going to be constructed. It’s the identical as all of the battery improvement initiatives in Germany that aren’t going to be constructed.

The purpose is, you’re going to see report capex expenditures in 2026.

[LS]: No, no, no. You’re a romantic. You’re looking at fairness, however…

[GR]: You’re desirous about 50%. When all people rushes for grid connections, they apply all over the place, together with initiatives which can be by no means going to be constructed. So for me, your prediction isn’t a correct prediction.

[LS]: You’ll say that. What I’m saying is that you simply pressured me, you cornered me into supplying you with a quantity. However my level is easy: the debt market won’t finance all the info facilities being introduced. Interval. There’s simply an excessive amount of debt. Now the suppliers of debt are beginning to freak out. The danger premium goes up.

In order that’s it. We comply with disagree. We’ll depend our chickens in 12 months.

Gerard, your first prediction.

[GR]: I’m not going to be imprecise. What you’re going to see is decrease international wind and photo voltaic installations in 2026 than in 2025. In actual fact, I’d even go as far as to say we’ve seen peak international wind and photo voltaic installations.

This isn’t to say the power transition is failing. What’s really taking place is that we’ve hit large system constraints. Grids are full, allowing is gradual, financing prices are greater, curtailment is rising, and seize costs are falling. That’s what’s occurring.

In some methods, wind and photo voltaic have develop into victims of their very own success. However as I stated, I see this as a part of the revolution we’re going by.

[LS]: Photo voltaic peaks? Photo voltaic. We did an episode final yr, and wind was set to develop into 2025. So sure, completely.

[MB]: I’d wish to replicate on this, as a result of it really leads into my prediction, which I gained’t share but. There’s one key nation I at all times take a look at, as a result of what China does strikes the needle. China modified its photo voltaic value factors for builders about three quarters of the best way by the yr, and everybody rushed to get photo voltaic constructed at these value factors.
We see the identical conduct all over the place on this planet. Whether or not it’s feed-in tariffs, the funding tax credit score or manufacturing tax credit score in america, fiscal incentives and value factors from governments make a distinction.

This yr, about 300 gigawatts of photo voltaic went in. Subsequent yr, the most effective estimate is probably going nearer to 200 gigawatts in China. So I believe Gerard could also be proper.

However in my prediction, I’m going to carry out a really attention-grabbing potential. For now, let’s end with Gerard’s. Laurent has stated nearly nothing. He hasn’t abused you but. What’s occurring?

[GR]: No, that’s all proper. That’s good. He’s been good to me. Go on, Michael, go straight into yours.

[MB]: China drops 100 gigawatts of capability in comparison with final yr. Let’s assume that’s true. There’s nonetheless greater than 300 gigawatts of photo voltaic panel manufacturing capability. And China isn’t an insular nation. It trades.

In order that 100 gigawatts of manufacturing isn’t going for use domestically. It’s going for use internationally. The identical dynamic we noticed in Pakistan, which was out of the blue flooded with low cost photo voltaic panels and, to a lesser extent, batteries, goes to play out elsewhere. Pakistan put in 17 gigawatts of principally behind-the-meter photo voltaic in a single yr, blowing previous everybody’s expectations and, as we mentioned earlier, disrupting the worldwide LNG market. That dynamic goes to happen globally.

We’ve already seen the breakout of photo voltaic in Africa. There’s a flywheel impact there. There are 1,000,000 Chinese language expats dwelling throughout Africa. The Belt and Street Initiative has constructed ports, railways, and 12,000 kilometers of highways. Africa is now shifting towards a free commerce zone between nations.

China has a large glut of photo voltaic panels and can have vital battery capability as nicely. What this tells me is that we’re already seeing an uptick. Final yr, about 2.5 gigawatts of photo voltaic had been deployed in Africa. My prediction for 2026 is 20 gigawatts. I’d wish to say extra.

[GR]: Wow, wow, wow.

[LS]: So prediction, Michael, 20 gigawatts of photo voltaic.

[MB]: In Africa in 2026. I believe I’m being conservative, frankly. We’re all going to be shocked.

[GR]: I’m really completely with you on that, Michael. I really agree with you completely.

[LS]: My second prediction is that the combat over the Greenhouse Gasoline Protocol goes to show ugly. Let me remind you of the earlier episodes. The Greenhouse Gasoline Protocol is a non-binding, voluntary system for accounting for CO₂ emissions. It was established 25 years in the past and is revised regularly. It’s now within the strategy of negotiating its third revision.

An important challenge is whether or not we depend electrons or certificates. Traditionally, emissions had been counted on a yearly foundation. The proposed new system would transfer to hourly accounting. Ninety-nine % of corporations agree with shifting towards an hourly system.

There are two holdouts, and I’m going to call them as a result of they’ve already been named within the press. I’ll name them Darth Amazon and Darth Meta, two Sith Lords who’re doing every thing they will to decrease the requirements. They’re backing an alternate system known as Emissions First, which, frankly, is a joke.

They’ve been outvoted, put within the minority, and now they’ve threatened to take the problem to the US Senate. So this combat goes to show very ugly. I hope cause prevails, however there are some powerful instances forward. That’s my prediction.

[MB]: I’ve really printed and analyzed fairly a bit concerning the new proposals. There are numerous teams that do accounting the outdated manner, they usually just like the outdated manner. There’s a spin-off from RMI, the nonprofit, known as WattTime. There’s additionally one other firm, ReSurety, which does legal responsibility assessments for VPPs and VPPAs.

Their place has at all times been that international emissions are what depend, so placing a photo voltaic farm in a high-coal area is best than placing one subsequent to a knowledge middle if that information middle occurs to be in a lower-coal space. That’s a legitimate level.

However the argument proper now could be about additionality, temporality, and locality. You possibly can consider it this manner. Additionality is bringing extra beer to the social gathering you’re going to. Don’t drink the beer that’s already there. Temporality is bringing beer when the social gathering is definitely taking place, not the subsequent day. Locality is bringing beer to the home that’s having the social gathering, not the home subsequent door.

What which means is it’s important to put new era close to the demand space. The demand has to match the era from the brand new asset, shut in time and site. That’s a troublesome normal. It’s an costly normal.

[LS]: It’s actually two guys. I’m not going to call them. They know precisely who they’re, set in opposition to everybody else. The truth that they’re keen to make use of strong-arm techniques, leveraging their lobbying energy and going to the Senate to do what you may name skulduggery, that’s not how this business or group works.

They’re within the minority. The reply can’t be “my manner or the freeway.” On this case, it’s going to be the freeway. That’s my prediction.

Okay, Gerard.

[GR]: The final prediction comes again to Michael, and we broadly agree on it: the golden days of LNG are over. What I imply by that’s we’re going to see an entire set of companies get into monetary issue as a result of they’ll be promoting at damaging margins. On the identical time, quite a lot of new LNG capability is coming on-line, which suggests you’re additionally going to see asset issues tied to these investments.

There are a couple of causes for this. First, international demand for fuel has peaked. It might have already got peaked in 2025, but when not, then in 2026. OECD demand is shrinking and continues to take action. Development in China is down. What Michael stated earlier about Pakistan rolling out photo voltaic and related developments is simply going to develop into extra essential.

This additionally implies that rising markets, as Pakistan illustrates, have gotten much more price-sensitive.

The ultimate level I’d make is that we’ll see Russian fuel come again into Europe, and that modifications the whole dynamic. I’m saying that as a result of I consider a part of any peace settlement will contain Russian fuel returning.

So the golden days of LNG are over, and I believe we’ll begin to see the restructuring of that system towards the tip of 2026.

[MB]: Let’s discuss that LNG factor.

[GR]: Go for it. You discuss it since you introduced it up, Michael. Go for it. Yeah, yeah.

[MB]: I believe Gerard is correct. I’ve been international LNG demand and progress, particularly North American progress in LNG exports. In Canada, we now have two large initiatives accredited by Mark Carney’s Main Tasks Workplace, together with pipelines.

The implications of all this capability coming on-line are very attention-grabbing for america, they usually level to a different financial downside. Joe Biden put a halt to new LNG export terminals as a result of home fuel costs had been rising. They had been turning into pegged to worldwide costs as a substitute of home ones. With large quantities of export capability coming on-line and bidding into spot markets, that may push home costs up.

On the identical time, the price of home manufacturing is rising. Simply as shale oil is shifting into extra marginal sources, shale fuel is hitting marginal websites as nicely. So home manufacturing prices are going up.

The result’s publicity to worldwide costs. Even when these costs are depressed, home power costs in america are more likely to spike as a result of the system stays closely gas-dependent. Individuals are going to be in actual monetary bother in america within the coming yr.

[LS]: Gents, if I summarize our six predictions:

Michael predicts that China’s battery techniques will drop to $40 per kilowatt-hour. ‘

I predict a credit score and grid disaster round new information facilities. You requested me for a quantity, so I stated 50% of introduced information facilities won’t ever be constructed.

Gerard predicts decrease wind and photo voltaic installations in 2026 in comparison with 2025.

Michael predicts 20 gigawatts of photo voltaic in Africa in 2026.

The combat over the revision of the Greenhouse Gasoline Protocol goes to show ugly.

And eventually, the LNG glut will create distressed belongings, with flat demand and extra provide arriving available on the market.

Gents, I’d wish to remind you and our listeners that Ukraine remains to be at conflict. It’s been nearly 4 years, and our hearts exit to the Ukrainians who’re resisting these terrible assaults every single day. Our ideas are with them.

Any final phrases, gents?

[GR]: I’m simply going to want you each an important 2026, and the identical to all our listeners. Thanks very a lot for listening. We’re trying ahead to serving you over the subsequent 12 months.