Higher gas prices drive some European electricity prices upwards

AleaSoft Energy Forecasting says TTF gas futures hit their highest settlement price since October 2023 in early January 2025, driving up electricity prices in several major European markets.

The first week of January saw an increase in electricity prices across some major European markets, but a decrease in prices across others, according to AleaSoft Energy Forecasting.

AleaSoft noted an increase in weekly average electricity prices in the Italian, Nordic, Portuguese and Spanish markets from the week prior. The consultancy recorded a decrease in average prices in the Belgian, British, Dutch, French and German markets.

All analyzed markets, bar the Nordic and German markets, registered weekly averages in excess of €85 ($87.59)/MWh. The Nordic market had the lowest average, at €34.96/MWh, while the Italian market had the highest average, at €140.39/MWh.

Countries which saw electricity prices increase were impacted by TTF gas futures prices reaching a weekly settlement price of €50.20/MWh on Jan. 2, the highest level AleaSoft has recorded since October 2023. Meanwhile, high levels of wind production in France and Germany allowed electricity prices to drop in these markets.

AleaSoft is predicting the second week of January will bring an increase in electricity prices across most analyzed markets. However, a drop in electricity prices in Italy, Portugal and Spain is expected, due to a forecasted increase in wind energy production.

The first week of January also brought a week-on-week decrease in solar energy production across France, Germany, Italy, Portugal and Spain, said AleaSoft.

The consultancy said the second week of January will bring an increase in solar energy production in Germany, while the downward trend is expected to continue in Italy and Spain.