2026 Energy Outlook: Renewables Rise, Emissions Flat Amid AI Surge

The U.S. energy landscape is set for a significant transformation in 2026, with rising electricity costs driven by surging demand from data centers and cryptocurrency mining. The U.S. Energy Information Administration (EIA) forecasts wholesale power prices will increase by 8.5% to $51 per megawatt-hour in 2026, up from $47/MWh in 2025. This surge is attributed to the West South Central region, including Texas, where electricity consumption from data centers and crypto mining is expanding rapidly.

Renewables are expected to account for a record 26% of U.S. electricity generation in 2026, while nuclear power will contribute 18%, pushing carbon-free electricity to 44% of the total. However, carbon dioxide emissions from power generation will remain largely unchanged, projected to decline slightly to 4.8 billion metric tons from 4.9 billion in 2025. The EIA also notes that natural gas will maintain a 40% share of electricity generation, outpacing coal and nuclear according to EIA press releases.

Tech companies are accelerating infrastructure investments to meet AI-driven demand. Google announced a $40 billion expansion of data centers in Texas through 2027, while Meta's CEO, Mark Zuckerberg, emphasized aggressive spending on AI compute infrastructure according to Bloomberg reports. Meta's Beaver Dam, Wisconsin, facility is part of a broader strategy to secure "industry-leading compute" for AI training, with Zuckerberg acknowledging the risk of overbuilding but proposing potential solutions like leasing excess capacity.

The rapid growth of AI infrastructure has sparked innovations in cooling solutions. Airsys Cooling Technologies unveiled PowerOne, a modular cooling system designed to handle AI-era power densities with 0 water usage efficiency (WUE) and industry-leading power compute effectiveness (PCE). Similarly, MiTAC Computing showcased liquid-cooled AI clusters at SC 2025, partnering with AMD and NVIDIA to optimize energy efficiency for hyperscale operations.

Geothermal energy is also gaining traction. Datavault AI secured a $8 million tokenization services agreement with Triton Geothermal to support a $125 million digital token offering for geothermal energy projects. Meanwhile, TransAlta's $95 million acquisition of a 310-MW natural gas portfolio in Ontario highlights continued reliance on fossil fuels amid the energy transition.

Natural gas companies are adapting to market dynamics. TotalEnergies acquired 50% of a flexible power generation portfolio in Europe, aiming to integrate gas with renewables. Stifel raised its price target for Natural Gas Services Group to $39, citing strong Q3 results and 2026 guidance.

The EIA's November Short-Term Energy Outlook also forecasts a 16% rise in natural gas prices to $4.00/MMBtu in 2026, driven by winter heating demand and LNG export growth. Conversely, oil prices are expected to decline to $55/barrel, with U.S. production stabilizing at 13.6 million barrels per day.

Regulatory shifts are reshaping the clean energy sector. New Jersey Resources faces challenges as the Trump administration curtails renewable incentives, slashing EIA's 2025–2030 renewable projections by 45%. Meanwhile, GK Energy's Q2 FY26 results showed a 36% year-over-year profit jump, driven by solar pump systems under India's PM-KUSUM scheme.

As the U.S. grapples with balancing AI-driven energy demands and sustainability goals, the interplay of renewables, natural gas, and innovative cooling technologies will define the sector's trajectory in 2026.