The Enernova Insights

PJM’s latest capacity market developments point to a power market that is becoming more expensive, more volatile, and more dependent on policy intervention.

When a commercial or industrial buyer asks for an electricity price, the supplier quotes off the offer side of the wholesale market and adds a risk premium to hold that price for the remainder of the day. The buyer pays for the supplier’s uncertainty and signs.

Twenty percent of global LNG supply moves through that strait. It is now closed, and it is uncertain when it will reopen. Meanwhile, oil and gas fields in the region are under attack.

The Gulf conflict poses significant risks to global natural gas markets, with Qatar at the center of the storm.

On January 16th, 2026, heading into the MLK long weekend, the tone was that winter was basically done. Then the weather models flipped hard over the holiday. When everyone came back, traders and energy buyers had to reprice risk all at once.

Illinois has taken a major step toward reshaping its power market with the passage of the Clean and Reliable Grid Affordability Act (S.B. 25). The new legislation aims to expand energy storage, promote virtual power plants (VPPs), and encourage cleaner, more efficient energy systems, all while preparing for the state’s surging power demand, particularly from new data centers.

PJM’s 2027 2028 capacity auction cleared at the FERC cap of about $333.44 per MW day yet still missed reliability targets.

At the heart of the United States power supply stack sits natural gas. It fuels most of the new generation, supports grid reliability, and increasingly underpins the power consumed by data centers, manufacturing, and electrification. Yet the physical behavior of shale gas production tells a more fragile story than most markets appreciate.

Across US power markets, the largest source of future cost increases is expected to come from non-energy components of the bill such as capacity, transmission, distribution, and other reliability charges. These charges are driven less by total energy usage and more by the amount of demand a customer place on the grid during peak conditions.