Introducing short-term forecasts

More reactive - but fundamentals grounded - forecasts

This blog was originally published April 16, 2026. We are circling back to the topic now to share some fresh insights.

At Resurety, we help our clients understand and manage two types of risks: weather risks and price risks. Our proprietary and trusted Weather-Smart fundamentals price forecasts, published twice a year, quantify these risks so that both buyers and sellers of renewable energy can better track the components that affect prices, and ultimately, project revenue. As power markets grow more volatile due to rapid changes in load and supply, commodity price swings due to geopolitics, and more frequent extreme weather events, we must update our forecasts more frequently. A standard practice in the industry is to use price forward curves as an instrument to gauge changes in forecast prices. But forward prices can be speculative and can overreact to changes in market sentiment. 

As of May 2026, we are now complementing our Weather-Smart fundamental price forecasts with a more dynamic short-term forecast in CleanSight Manage. The short-term forecast strikes a balance between being responsive to the materialized price swings while not being over-reactive to speculative price signals. These hourly forecasts are still grounded in fundamentals but are refreshed continuously. In addition to changes in supply or demand shocks and commodity price swings, the model is responsive to any materialized price swings caused by extreme weather events like heat waves. 

What does this have to do with the War in Iran?

As oil production and supply chains have been upended, the price of crude oil has increased from just below $60 at the beginning of 2026 to over $110 – over an 80% increase. Crude oil makes up less than 1% of the U.S. electricity supply; the most prevalent source of U.S. electricity is natural gas. The conflict in Iran and the closure of the Strait of Hormuz have precipitated what has been called the "worst energy shock of all time," severely curtailing global oil and LNG output. 

While intuition suggests such a massive spike in crude would send domestic electricity costs soaring in tandem, the structural evolution of the U.S. market since the 2019 shale revolution provides a critical disconnect. Because the U.S. remains an export-capacity-constrained state for natural gas, our domestic supply cannot be fully diverted to meet global demand. This "trapped" surplus effectively decouples domestic energy costs from international volatility, suggesting that even as global oil prices fluctuate, U.S. natural gas—and by extension, PPA power prices—remain remarkably insulated.

As a case study, we looked at the two months leading up to the War in Iran at the end of February 2026. We analyzed how the forecast for the average price for the month of March evolved over time. The market forward price curves, Resurety's fundamentals-based forecast, and Resurety's short-term forecast exhibit very different characteristics. 

• Market forward prices: Rose from above $45 to near $65/MWh and then fell back to just over $40/MWh. This volatility can create more uncertainty for clients.
• Resurety fundamentals-based forecast: Held constant at $39/MWh because it is updated twice a year. These forecasts are designed not to be overreactive to market dynamics; while this can be a valuable tool for planning, we recognize that some clients need more data during periods of extreme dynamism in market conditions. 
• Resurety short-term forecasts: Moved from $45 to $36 and then to $45/MWh. short-term forecasts demonstrate a more measured reaction because they react to the materialized price volatility. These forecasts are not as sensitive to the risk or fear premium present in the market sentiment, helping our clients to see signal through the noise in periods of volatility.  

But how do these volatile forecasts compare to the actual prices in March 2026?

We looked at the error in the forecasts compared to the actual monthly average price (around $34/MWh).

When compared to the actual March monthly average price (through March 26th), the percent error for forward curves ranged from around 30% to over 100% error. 

With our Resurety short-term forecast, this error ranged from 20% to 40%. While over the course of the entire period the fundamentals-based (non-reactive) forecast achieves a better accuracy at just above 20% error.

In this scenario, where the average price in March 2026 was not significantly affected ($34 vs $35/MWh in 2025) by the ongoing war with Iran, our non-reactive fundamentals-based forecast wins. However, in a scenario where external factors do result in changes in the actual price, like a heat wave (stay tuned for a case study on that!), a more reactive but fundamentals grounded forecast like our short-term forecast can be useful. 

Update June 2026

We extended this analysis (to May 25th 2026) to see how the model forecasts compare for the recent month of June 2026.

Beginning in the second half of February, the short-term forecast for the average June price stabilizes near $47/MWh, after some volatility in the first couple of months in the year. The forward curves during the same period ranged from $47 to $55/MWh averaging around $51/MWh. The measured reactivity of the short-term forecast pays off in the month of June while the forward curves over-estimate the price. 

Both our short-term forecast and our Weather-Smart fundamentals forecast can be found on Resurety’s CleanSight Manage. 

We’ve also just released launched an in-depth analysis of our Weather-Smart forecast on CleanSight Reports: Power Price Forecast Insights for Q2 2026. The report breaks down the forecasts, details our supply and demand assumptions through interactive figures, and highlights the major trends for each market. As a subscriber, you will learn how to:

• Navigate weather variability: Discover how different weather conditions drive price outcomes. By mapping out potential results based on actual weather scenarios (e.g., mild vs. extreme heat), our Weather-Smart forecasts help you effectively model future project value scenarios.

• Track market trends: Get a summary of the major supply and demand changes in each market and see how they can impact wind and solar project value.

• Analyze realistic load growth: Market operators’ load projections can carry high uncertainty. However, Resurety’s load forecasts account for real-world supply chain constraints and interconnection backlogs.

Power Price Forecast Insights for Q2 2026 is exclusive to CleanSight Reports subscribers. CleanSight reports combine Resurety’s expert analysis with our industry-leading data.

If you’re interested in learning more about Resurety's forecasts and CleanSight Reports, reach out to a member of our team: [email protected].