Goldman Sachs Power Tracker: US Markets Tightening Into Summer, Only Marginally Eased by Coal Power Policy
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Goldman Sachs projects that US electricity markets will tighten during the summer of 2026, driven by robust demand growth and ongoing supply constraints. Adjustments to coal power policies are expected to provide only marginal relief, falling well short of fundamentally altering the overall supply-demand balance. The bank anticipates that reserve margins across multiple regions will decline, exerting significant upward pressure on electricity prices.
Specifically, the PJM market is projected to see summer peak load growth of 2.3% against new generation capacity additions of just 1.1%, reducing reserve margins from 18% to 15%. In ERCOT, the reserve margin may drop to 12.5%, down from 15.2% in 2025, elevating blackout risks. While coal power policy changes allow certain units to delay retirement, this only adds approximately 3 GW of capacity, barely 0.5% of total summer demand. Natural gas will increasingly set marginal prices, meaning a 10% gas price rise could lift power costs by 5%. Furthermore, transmission bottlenecks between MISO and PJM limit effective power transfers. Demand-side response measures can only cut about 2% of peak load. Goldman expects national average summer electricity prices to rise 8-12% year-over-year, with upside risk intensifying if natural gas prices exceed $3/MMBtu. No specific stock recommendations or target prices were provided.
Key exhibits
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
