Power Barometer 2026:
The power proof
A blockade in the Strait of Hormuz. The hottest summer on record. European electricity prices rose in 2026 – but four times less than gas. This is “the Power Proof”.
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This report is an independent market intelligence product developed by Eurelectric’s Market Intelligence team. It does not represent an official or adopted position of Eurelectric or its membership.
Introduction
The power proof
The Iran shock hit oil and gas hard; power barely moved. Spain vs. Italy shows why. Gas is retreating from the merit order. Clean power hit a record high.
When the Iran conflict sent oil and gas prices surging by 40% this spring, European power prices fell. That decoupling is not an accident – it is the result of a decade of investment in clean, domestic electricity. This first act presents the proof: markets that have built high shares of renewables have structurally insulated themselves from fossil fuel shocks. Spain experienced a brief price increase before quickly returning to lower levels, while Italy faced more sustained upward pressure. The difference was not geography or luck – it was the carbon content of their grids. The energy security case for electrification is no longer theoretical. It is in the data.
Feb-May 2026
01
Electricity in Europe resisted the Hormuz crisis - and the summer that followed
Electricity prices did rise in 2026. That is not in dispute, and consumers felt it. What the Eurelectric Power Barometer shows is the comparison: against a fossil fuel shock that doubled gas prices, electricity moved by a quarter of that. The gap between those two numbers is the story of the year.
The first shock was geopolitical. Following the blockade of the Strait of Hormuz, Brent crude prices rose from $73 to $103 a barrel between February and May, up 40%. Title Transfer Facility (TTF) gas followed almost exactly, from €33 to €47/MWh, up 41%.
Meanwhile, electricity prices told another story, with clean and renewable power proving resilience against external shocks. The EU average day-ahead electricity price fell by 7%, from €103 to €91/MWh. In February, the power price still sat above the marginal cost of gas generation; from March onwards, it sat consistently below it. With fossil-fuel generation setting prices less frequently, the transmission of fuel price shocks to electricity prices has weakened during this period.
The second shock was the weather. Successive heatwaves lifted demand, drained Nordic reservoirs and cut French nuclear output. Prices climbed 59% between April and August, reaching €126.7/MWh. Severe — but over the full February-to-August window, gas prices rose 88.4% against electricity’s 22.8%. Gas moved four times faster.
Summer 2026: what pushed European electricity prices up
🔥Gas at multi-year highs
TTF front-month reached roughly €82/MWh in September the highest since January 2023 and more than twice its level in the same period of 2025, due to geopolitical risk and a tight LNG market.
💧 Nordic hydro 27% below 2025
January-to-August average storage fell 23% in Norway and 39% in Sweden, reducing a major source of low-cost flexible generation from the system.
⚛️ French nuclear down 19.2 points
Availability fell from 98.9% at the start of 2026 to 79.7% by end-August, as heatwaves coincided with reduced output due to planned maintenance works.
Which EU countries had the highest electricity prices?
The average conceals wide divergence. On the evening of 23 June 2026, day-ahead prices ranged from €135/MWh in Portugal to €579/MWh in Belgium, with central European markets between €480 and €545. Evening peaks, not baseload, are where the system is exposed - which is precisely what storage, flexibility and an enhanced grid address.
In sum, 2026 saw all possible crises converge: another war targeting energy coupled by disastrous heatwaves as a consequence of climate change. Yet, the power sector proved that it is not in the same place as in 2022, when Russia’s military invasion of Ukraine and the weaponisation of gas supply made prices skyrocket. The REPOWER EU plan is giving its fruits, and clean power is proving to be our shield.
02
How to lower electricity prices in Europe?
Going forward, the question is how to make prices more resistant still. The answer lies in staying the course on electrification, increasing Europe’s storage capacity, accelerating grid investments and untap the potential of flexibility to make the most out of the energy system.
These are all existing technologies and practices: whether EU member states apply them or not makes the difference in electricity prices. We’ve looked into three specific case studies showing how clean and renewable electricity, paired with storage and flexibility, can withstand the challenges of our times and shield consumers from price shocks.
1. Batteries flattened the evening peak
- Bulgaria’s premium over the EU average narrowed from 21.2% in 2024 to 8.3% in 2026
- The wholesale price index moved from 91 against an EU average of 75, to 112 against 103
- Convergence came from storage absorbing midday solar and releasing it into the evening
Battery capacity installed
5.4 GW
Around a fifth of Bulgaria’s total generation capacity, built from a standing start in roughly two years.
The transferable lesson
Storage does not need to be everywhere to work. It needs to be present in the hours when the system is tight – which is why a relatively small volume, correctly placed in the evening peak, moved a whole national price curve.
2. Demand that moves with the price
- Installed e-boiler capacity reached roughly 3 GW by end-2025 — about a quarter of peak load
- Stable nuclear and hydro output, alongside continued wind growth, reinforced the effect
- This is demand-side response already in the ground, not a future market product
Average power price, March to August 2026
€38.91/MWh
The lowest in Europe – through the same months in which prices elsewhere rose by more than half.
3. EU policy that stops penalising electricity
- Household electricity prices sat around 6% below the EU average
- Household gas prices ran more than 25% above the EU average — the right way round
- Electricity used for space and water heating rose 23%, evidence the policy changed behaviour
When gas prices moved this summer, Austrian households that had switched were no longer standing in front of them.
Installed heat pump capacity since 2015
+125%
From roughly 2.2 to 4.9 GW thermal, with the steepest growth following the programme’s introduction.
The transferable lesson
Most member states still tax and levy electricity more heavily than the gas it replaces. Correcting that asymmetry costs nothing to build and changes the consumer’s arithmetic immediately.
03
Europe needs far more electricity storage to cushion the next price shock
If there is one conclusion the 2026 data forces, it is this. Storage is one of the major technologies that can convert abundant cheap generation at midday into relief in the expensive evening hours. It is starting to come – but nowhere near the pace the 2030 system requires.
64 GW
Where Europe stands today
Utility-scale storage installed across the EU in 2025, still dominated by pumped hydro. Batteries remain a small share of the total, concentrated in a handful of markets.
78 GW
Where current pipelines lead
The expected level once announced, permitted and under-construction projects are counted. That is close to a doubling of battery capacity – real progress, and the reason the direction of travel is right even if the pace is not.
200 GW
What 2030 requires
The benchmark for the end of the decade. Against the expected 78 GW, the shortfall is substantial — and the gap does not close on its own, because most of what is counted as “expected” is not yet certain.
42 GW
The part still at risk
Of the expected battery capacity, only 8.4 GW is under construction and 20 GW permitted. The remaining 42 GW has been announced but not secured – exposed to permitting timelines, grid connection queues and financing conditions.
Why it is urgent
Every year of delay is a year in which evening peaks stay exposed to scarcity pricing, and in which the clean generation Europe has already paid for is wasted rather than shifted. Storage is not a decarbonisation instrument in this context.
04
Where the European power sector stands
Power Barometer is also the annual picture of the sector itself – the generation mix, emissions, the race to 2030 capacity, and the grids that have to carry all of it. On these measures, 2026 was a strong year.
EU power sector CO2 emissions
Measured against 2008, power sector emissions are down 55%, against 30% for manufacturing and 10% for transport. The power sector is decarbonising faster than any other part of the European economy — which is the underlying reason electrification is also a price hedge.
Electricity generation: is Europe going to hit its 2030 renewables target?
Clean sources generated 73% of EU electricity in 2026, with fossil fuels down to 27% of the mix. Solar added 36.4 TWh year on year between January and August – the largest annual increase ever recorded in the EU – and wind rebounded by 23.5 TWh combined. Hydro fell 12.1 TWh on poor water conditions and nuclear 11.8 TWh, which is what kept 16.3 TWh of additional gas generation in the system. Coal continued its slow retreat, down 1.4 TWh.
The race to 2030
Installed capacity grew from 1,016 GW in 2022 to 1,255 GW in 2025. The Commission's 2030 pathway implies 1,639 GW and national plans add up to 1,750 GW. Roughly 450 GW must be built and connected within five years - most of it solar and wind, and none of it is useful until it reaches the grid.
Electricity grids: €50 billion coming - will permitting keep up?
Annual investment in EU power distribution grids rose from €24 billion in 2021 to €36 billion in 2024 and is set to reach €48 billion by 2027, growing 12.5% a year. The capital is arriving. Permitting timelines, anticipatory investment rules and tariff design now decide how much of it becomes connected capacity — and whether the 450 GW arrives on time.
05
The electricity demand shift: industry stalled, transport, heating and AI growing
The last picture the Barometer gives is of demand – and it is a picture of redistribution rather than growth. The energy-intensive industries that once anchored European electricity consumption have not fully recovered. What is growing is transport, heating and, increasingly fast, the compute behind artificial intelligence.
Energy-intensive industry · Not recovered
The demand that has not come back
Final electricity consumption by EU industry remains 9% below pre-crisis levels. The energy-intensive sectors hit hardest by the 2022 crisis – iron, steel and ferro-alloys, chemicals and petrochemicals – have yet to return to their earlier production levels, while manufacturing as a whole has broadly recovered.
This is the structural weak point in European electricity demand: not a cyclical dip, but production that has not restarted.
Transport · Growing fast
EV charging now rivals a member state
EU sales of electric passenger cars reached almost 3 million in 2025, up 31% on 2024, with electric models at 31% of new registrations in 2026 to date against 18% in 2021.
Charging demand has climbed from 3.5 TWh in 2020 to an estimated 28.8 TWh in 2025 — approaching Ireland’s entire annual consumption of 30.9 TWh.
More than Poland uses today
54 TWh rests on CO₂ standards
Heating · Stabilising
Heat pumps level off after a sharp contraction
The installed stock across 13 EU countries reached 28 million in 2025, with 2.3 million new units sold. Sales have steadied after falling from a 2022 peak of 2.9 million, but the rebound is uneven and depends on whether national policy keeps electric heating cheaper to run than gas. Austria shows the mechanism working; most member states have not applied it.
Policy-dependent
Taxes and levies
AI and data centres · The new load
Compute is becoming a structural driver of European electricity demand
Estimates of European data centre consumption diverge widely – from roughly 110 TWh to 250 TWh by 2030 against 63 to 133 TWh in 2024 – but every scenario points upwards, and the demand arrives in clusters rather than spread across the map. That makes it a grid planning question before it is a generation question. It can also be an asset rather than a strain: shiftable data centre demand could grow from 9 TWh in 2030 to 19 TWh in 2040, and flexible operation would cut electricity procurement costs by 4 to 5%. The 22-year agreement between Fortum and Google, announced in September 2026, shows the constructive version – compute demand underwriting firm clean capacity instead of competing for it.
Grid planning
Long-term PPAs
Flexibility potential
06
How electricity can keep power-proofing Europe's economy
2026 showed that electricity shields European consumers and industry from fossil price shocks. Keeping that shield — and strengthening it before the next crisis — comes down to four actions.
01
Markets
- Let the market deliver efficient price signals
- Encourage flexibility on demand and supply
- Avoid harmful market interventions, distorting prices & discouraging investments
02
Grids
- Facilitate permitting
- Allow anticipatory investment & cost-effective measures
- Ensure pragmatic solutions on tariff design
03
Electrification
- Electrify demand through dedicated KPIs & enabling policies
- Stop tax penalisation of electricity vs gas
- Support industrial electrification with new funding tools
04
Road to 2040
- Support the GHG target, backed by a meaningtul ETS/ ETS2
- Balance climate & cost efficiency to preserve competitiveness
- Ensure investor predictability for all decarbonised technologies
What data from the European power sector says
The verdict of the Power Barometer 2026 is that the European power system did its job under pressure. Prices rose, but a quarter as much as the fuel that caused the crisis. Clean generation is the backbone of the system and emissions are at a record low.
The same data shows where the system is thin. Storage is a fraction of what 2030 requires, and the consequences — negative prices, falling solar capture prices — are already visible. Grid investment is rising but permitting is not keeping pace. Industrial demand has not recovered, while transport, heating and AI are adding load at speed.
Bulgaria, Finland and Austria have each shown that these are solvable problems, not structural limits. The task now is to make their answers the European norm.
Download the power barometer
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Power Barometer 2026
All key findings and insights from Power Barometer 2026.
Full package
Power Barometer 2026 full package
The Premium version goes beyond the core report with 100+ analytical slides and the underlying Excel datasets.
€590
This report is an independent market intelligence product developed by Eurelectric’s Market Intelligence team. It does not represent an official or adopted position of Eurelectric or its membership.
Related Resources
Further Reading
Eurelectric · 2025
Power Barometer 2025: In shape for the future
Last year’s edition, and the baseline against which the 2026 stress test should be read.
Eurelectric & Accenture · 2026
Power Couples: Enhancing industrial competitiveness through electrification
Why industrial demand is not electrifying at pace, and the partnership models that make it bankable.
Eurelectric · Data Platform
Elda: Europe's Electricity Data
Production, demand, prices, capacity, emissions and cross-border flows — the data behind these figures.