Global energy and data markets are at a tipping point. From foreign investment reshaping renewables to battery storage unlocking grid resilience and AI driving hyperscale demand, the race is on for solutions that deliver speed, sustainability and certainty. In this article we define the trends shaping energy and infrastructure in 2026.
Published: 27 January 2026
Author: James Woods-Robertson
Investment flows defy uncertainty
Despite a rapidly changing geopolitical landscape, there seems to be little slowdown in money seeking a home in renewable and clean energy projects. We will continue to see strong direct investment in UK energy infrastructure projects from the US, Singapore and other jurisdictions with data centres, projects under Gate 2 offers and eHGV charging projects being particular drivers in 2026.
We are also seeing a surge of growth and opportunity overseas, where UK capital and expertise is being deployed, such as Octopus’ recent alliance with Masdar in the Middle East. Our team visited Singapore and Malaysia last year, and saw enormous opportunity for investment, with a high skills base, a stable political environment and government willingness to take stakes in investment projects paving the way for extensive renewables, battery storage and data centre expansion in the area. We return to the US in May 2026 to see how the clean energy revolution is faring under the current administration, but the signs are that many projects are continuing at pace.
Grid reform reshapes battery storage strategy
Grid connection reform has dominated the UK energy story. A significant share of the battery storage pipeline still hasn’t secured a Gate 2 offer, resetting how developers create and protect value in early-stage projects. For those with Gate 2 approval, confidence and speed are now on the table. Looking ahead, record capacity is expected to connect in 2026–27, alongside new market access models – large-scale tolling agreements, floor price products and the familiar merchant structures. Supply chains remain a critical factor, with lead times driving strategic acquisitions of transformer and switchgear manufacturers as corporates race to control both data centre development and renewables.
Battery storage is also stepping up as an enabler for large-scale demand projects delivering resilience, backup and grid stability, and acting as a buffer for generation projects with smaller connection capacity. The real question? How far developers and funders will go to absorb the cost and complexity of BESS against the prize of faster, cheaper grid connections.
Germany tells a similar story of growth despite reform and rising grid connection costs. Tolling and floor structures are gaining traction among major players, and the outlook for another strong year remains clear.
Data centres under pressure: Growth meets grid reality
Artificial intelligence (AI) is rewriting the rules of data centre demand, driving hyperscale growth and pushing power consumption to unprecedented levels as GPU-heavy workloads scale at speed. At the same time, power scarcity is reshaping the map – traditional hubs like London, Frankfurt and Amsterdam are under strain, forcing developers to pivot towards secondary cities with stronger grid capacity and invest in on-site generation, microgrids and renewable power purchase agreements (PPAs).
Sustainability isn’t optional; it’s the licence to operate. Carbon-neutral strategies, waste heat recovery and advanced cooling are no longer nice-to-haves – they’re the new standard for resilience, reputation and regulatory compliance.
Data centre power crunch sparks innovation
Global data centre energy demand is accelerating at a pace few predicted, which is set to hit 1,050 TWh by 2026, a 165% jump from 2020, driven by AI workloads that consume power at scale. That surge is putting grids under pressure and forcing innovation.
Developers are moving beyond traditional hubs to secondary cities with stronger capacity and building resilience through on-site generation – gas turbines, battery storage, microgrids, hydrogen and even small modular reactors. The message is clear: flexibility isn’t a nice-to-have, it’s survival. Those who invest in diverse, sustainable power portfolios will be the ones who keep pace with growth and regulatory expectations.
Grid connections: The new currency of growth
The real value now lies in grid connections and the ability to move projects forward – not just the size of your pipeline. Innovative solutions that ease pressure on the grid are gaining traction, reducing the need for large connection capacity. We’re already seeing operators secure major connections – like Relode Energy – and share them across multiple demand users, from data centres to EHGV charging.
The first data centre projects using private wire networks and large-scale batteries are here, cutting connection costs and timelines. This builds on the groundwork laid by Pivot Power and EDF Renewables in creating these networks. At the same time, regulatory barriers to local markets are starting to fall, unlocking efficiencies where local demand and generation meet. We’re excited to work with partners such as Urbanchain to make this a reality for businesses and communities.
From price pressure to policy support: The outlook for generators
Downwards pressure on wholesale electricity prices has nudged the market back in favour of offtakers, but expect that balance to shift back and forth during the year as geopolitical (in)stability plays out in energy markets.
The conclusion of the Gate-2-to-Whole-Queue process offers to accelerate deployment of well-progressed generation assets. This should be good news for generators, with corporate power purchase agreement offtakers continuing to focus on timing of delivery and risk of delay when assessing projects.
More good news for generators is that demand is only going one way, and the UK still maintains strong policy support for new renewables. Routes to market for contracts for difference (CfD) projects generally remains a liquid market, so expect the CfD to continue to be a preferred option.
Corporate appetite for Renewable Energy Guarantees of Origin (REGO) deals has also picked up (after several years as the less-preferred option), giving generators a menu of options for how they sell their power and REGOs in the UK market.