European Power & Gas Price Curves

European power & gas curves (past 12 months) and near-term outlook

Over the past year European wholesale power and TTF gas curves showed a clear seasonality plus episodic volatility. Wholesale day-ahead electricity averages fell from the post-crisis peaks seen in 2022 and 2023 and remained relatively subdued through 2024, aided by cheaper gas and growing renewables output; by 2024 the EU average day-ahead price had dropped into the low-€80s/MWh range. Gas, however, moved more erratically in 2025: after a mid-year softening, spot TTF spiked in early winter as colder weather and drawdowns tightened short-term balances. (Power Barometer)

The primary drivers were straightforward market mechanics plus a few policy and structural shifts. High LNG competition for cargoes (Asia), lower wind/hydro output in key months, and the changing pattern of Russian pipeline transit left storage and flows more price-sensitive; inventories that entered winter fuller than the 2022 crisis still fell quickly under cold snaps. On the power side, increased renewable penetration has pushed marginal generation toward lower-cost zero-fuel options, which has trimmed average prices but simultaneously increased the value of flexible gas capacity when renewables underperform. (IEA)

Forward curves and market sentiment from finance and industry sources point to a cautious, mean-reverting outlook with large tail risk. ICE TTF futures for the coming quarters have migrated down toward the high-€20s–€40s/MWh band, implying weaker structural upside under normal weather assumptions, but traders and option markets are pricing a non-trivial probability of winter spikes and abrupt volatility if supply or weather shocks occur. Institutional forecasters (IEA, market analysts) expect gas demand to be somewhat higher in 2025 compared with a year earlier due to power-sector switching, but not a sustained return to the crisis highs unless major supply disruption happens. (ICE)

From an investor's perspective the policy and weather forks are what matter for positioning. Near term, monitor storage trajectories, LNG tanker arbitrage flows, and seasonal wind/hydro forecasts — those three variables will dominate gamma in the front of the curve. Tactical trades that look attractive now: (1) calendar spreads that capture expected seasonal forward roll if storage rebuilds continue; (2) long optionality (cheap puts on power/gas dips plus calls for cold-winter spikes) because skew remains elevated; and (3) careful basis plays between national power hubs where renewables penetration and grid constraints create persistent price dispersion. The single big caveat: a prolonged cold snap or renewed geopolitical disruption could lift TTF back toward the €50–€60/MWh area seen in past spikes, so risk sizing must presume that scenario. (Financial Times)