EV demand, PJM backstop, UK gas exposure and Hormuz product flows reset energy risk

Key Developments

EV load growth slows after federal purchase credits expire

EIA estimated that U.S. light-duty electric vehicles consumed 8% more electricity in 1H26 than in 2H25, below the 13%-24% six-month growth range seen in recent periods, and said EV electricity use has more than doubled since 1H23 to nearly 14 billion kWh in 1H26 (EIA). The same EIA release tied the slowdown to a sales decline after the New Clean Vehicle Credit and Qualified Commercial Clean Vehicle Credit ended on Sept. 30, 2025, and reported that new EV sales in 1H26 were down 19% versus 2H25 (EIA). EIA also noted that EVs were 2% of all registered U.S. light-duty vehicles in 2024, which means electricity load from transportation is still growing from a small installed-base share even as the sales channel cools (EIA).

The read-through is that distribution planning should separate fleet electrification from consumer EV sales momentum. Slower sales can flatten near-term residential charging assumptions, but the already-installed fleet still raised electricity consumption in 1H26, so the operational question shifts to where charging accumulates and whether local feeders see concentrated evening peaks rather than whether aggregate EV load disappears (EIA).

What to watch: EIA said it will continue estimating EV electricity use in the Monthly Energy Review and State Energy Data System, making the next semiannual updates the key check on whether the post-credit sales drop is a one-period adjustment or a durable load-growth reset (EIA).

PJM pauses its data-center backstop after FERC rejects core terms

Utility Dive reported that PJM delayed its planned reliability backstop procurement after FERC partly approved the proposal on Sept. 29 and raised concerns over cost allocation, transmission-owner exit rules and load-serving-entity collateral requirements (Utility Dive). The auction had been scheduled to accept offers from Sept. 30 through Oct. 21, and PJM intended to acquire 6.8 GW of new capacity for the 2028/29 delivery year after falling below reserve-margin targets amid data-center demand forecasts (Utility Dive). FERC Chair Laura Swett said the commission would not be forced into accepting an eleventh-hour procurement mechanism with billion-dollar consumer implications, while PJM said it would work quickly on fixes (Utility Dive).

The read-through is that large-load reliability tools are moving from concept to rate-design test. A 6.8 GW procurement can address capacity adequacy only if the buyer-pay rules, collateral package and exit mechanics survive regulatory review; otherwise, the mechanism risks becoming another contested allocation layer on top of the data-center interconnection queue (Utility Dive).

What to watch: PJM said a new procurement timeline is not yet determined, so the next gate is whether PJM files fixes quickly enough to preserve a 2028/29 reliability bridge without reopening broader disputes over who pays for data-center-driven capacity (Utility Dive).

Renewables hedge UK gas imports while Hormuz keeps fuel markets tight

Carbon Brief estimated that UK wind and solar generation has avoided £5.9 billion of gas imports since the start of the Hormuz crisis and would otherwise have required more than 100 additional LNG tanker deliveries (Carbon Brief). The analysis said UK wind and solar output is up 14% year over year in 2026 to date, gas-fired electricity is down nearly 10%, and wind and solar have supplied a record 41% of UK electricity demand versus 25% from gas (Carbon Brief). Carbon Brief also put September-to-date avoided import costs at £1.3 billion, with nearly 10 TWh of wind and solar generation and UK gas prices averaging 189p per therm in September (Carbon Brief).

The second-order effect is that renewables are functioning less as a pure emissions lever and more as an import-bill shock absorber. The UK example shows how domestic zero-fuel-cost generation can reduce exposure to LNG competition when gas storage is low and winter demand is approaching, even if retail gas bills remain exposed to international fuel pricing (Carbon Brief).

What to watch: Carbon Brief reported that typical UK household gas bills will be 33% higher from Oct. 1 than in April while electricity bills will have risen 4%, so the tariff spread is the near-term test of whether power-market reform and clean generation can keep weakening the gas-to-electricity price link (Carbon Brief).

Hormuz crude flows recover, but refined-product flows remain the bottleneck

CNBC reported Kpler data showing crude transiting Hormuz at a seven-day average of 13.5 million b/d as of Monday, matching the prewar shipment baseline through the strait (CNBC). Middle East crude shipments, including the Persian Gulf and Red Sea, reached a seven-day average of 19.5 million b/d, above a prewar baseline of about 17 million b/d, but refined products through Hormuz were only 677,000 b/d versus 3.6 million b/d before the war (CNBC). CNBC also reported that crude plus product shipments totaled 14.2 million b/d, about 80% of the Hormuz prewar baseline of about 17 million b/d, while more than 70% of August crude crossing Hormuz switched tankers off the UAE or Oman (CNBC).

Figure 1 — Crude through Hormuz is back at its 13.5 million b/d prewar baseline, but refined products remain at just 677,000 b/d versus 3.6 million b/d before the war. Source: (CNBC).

The operational read is that headline crude normalization can mask a refined-fuels constraint. Shuttle transfers, military escorts and pipeline rerouting can move crude volumes, but diesel and other refined products remain the pressure point because product flows are far below the prewar baseline and refinery disruptions outside the Gulf are also tightening supply (CNBC).

What to watch: CNBC reported that about 40% of Gulf crude now bypasses Hormuz through Saudi and UAE pipelines versus 17% before the war, and that Saudi Red Sea loadings picked up after the East-West pipeline outage, so pipeline reliability and ship-to-ship transfer capacity are the practical indicators for whether crude resilience can persist (CNBC).

This is an AI Briefing — AI-generated analysis published under TLCapital.AI. It is not personal research or positions, and it is not investment advice. Figures are sourced to primary filings with dates noted throughout. Do your own diligence.