Energy trends 2026: How GB reforms, renewable growth will shape the market
Editor's note: Aysel Mammadzada is an Azerbaijan-based journalist. The views expressed in this article are the author’s own and do not necessarily reflect those of News.Az.
As 2026 looms, the global energy landscape, and the British power system in particular, stands at a critical crossroads. On one hand, the oil and gas markets are teetering under the weight of oversupply, geopolitical uncertainty, and changing demand patterns. On the other, Great Britain is grappling with network reforms, soaring business electricity costs, and the pressing imperative to hit Clean Power 2030 targets. This convergence isn’t just another market cycle — it’s a defining moment that will shape energy strategy for years to come.
Oil and gas glut: A market under pressure
Global oil markets are bracing for a rough ride. Following a turbulent 2025, which saw geopolitical shocks from the Israel-Iran conflict to OPEC+ production swings, supply is set to outstrip demand by nearly 4%, per the International Energy Agency (IEA). The surge in U.S., Canadian, and Brazilian production, paired with China’s stockpiling, suggests crude prices may struggle to recover anytime soon.
Meanwhile, LNG tells a more nuanced story. Rising export capacity could temporarily squeeze margins, but consumers in Europe and Asia may welcome the relief of falling prices. It’s a reminder that energy abundance doesn’t hit every corner of the market equally — winners and losers will be defined by positioning and timing.
Diesel margins defy the trend
Interestingly, diesel refining margins continue to shine, up 30% in 2025. Supply disruptions from the Ukraine conflict, EU sanctions on Russian fuels, and limited new refining capacity have created a rare sweet spot for diesel. It’s a stark illustration of the complexity in today’s markets: crude oversupply doesn’t automatically mean every product sees price pain.
GB businesses feeling the pinch
At home, Great Britain’s businesses face a different set of challenges. Electricity bills are increasingly driven by non-commodity costs rather than the price of energy itself. Transmission charges, network reforms, and new regulatory elements, such as the Nuclear Regulated Asset Base, now represent a growing proportion of the bill. By 2026, these costs could account for nearly 60% of a typical business electricity bill.
For companies outside exemption schemes, this reality will demand strategic action. Behind-the-meter solar installations, battery storage, and onsite generation are no longer optional niceties — they are becoming essential tools for cost management. Businesses that fail to explore these avenues risk being caught off guard by rising network costs, while proactive companies could turn the challenge into a competitive advantage.
Grid reform could unlock renewable growth
One potential silver lining is the shift from “first come, first served” to “First Ready, First Needed, First Connected” for grid connections. With 132GW of generation and storage assets slated for connection by 2030, 2026 could finally see a meaningful uptick in renewable deployments — if bottlenecks are managed. After record wind curtailments in 2025, it’s clear that grid access and storage revenue disparities between regions must be addressed to unlock the next phase of growth.
Market fragmentation and balancing opportunities
Rising network costs and ongoing market reforms are contributing to fragmentation in GB’s energy system, but fragmentation also creates opportunity. Suppliers are experimenting with innovative tariff structures, renewable-linked power purchase agreements (PPAs), and participation in half-hourly settlements. Investors and energy users who embrace flexibility, actively engage with balancing markets, and explore new revenue streams will likely outperform more passive players.
Policy reforms, such as the Transmission Network Use of System (TNUoS) changes and Reformed National Pricing, are still years away from full implementation. Yet incremental adjustments are already nudging the market in new directions, offering early movers the chance to capture strategic advantages. The lesson is clear: waiting for a fully stabilized market could mean missing the most profitable opportunities in 2026.
Renewables remain the long-term winner
Despite a recent downward revision from the IEA on global renewable growth, electricity demand continues to rise — fueled by data centers, industrial electrification, and transport. GB’s renewable sector benefits from falling costs in solar, wind, and battery storage. While fossil fuel volatility dominates headlines, the long-term trajectory of renewables is undeniably upward.
The bottom line: Strategy over short-term noise
2026 will be a year of contrasts and choices. Globally, oil and gas markets are awash, while GB contends with rising electricity costs, network constraints, and the urgent need to scale renewables. The winners won’t be the passive observers — they’ll be the businesses, investors, and policymakers who actively adapt: leveraging onsite generation, storage, flexible procurement strategies, and staying ahead of market reforms.
Simply put: in a year defined by surplus, structural change, and renewable resilience, strategic action will separate the leaders from the laggards.
(If you possess specialized knowledge and wish to contribute, please reach out to us at opinions@news.az).
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