February Recap: Sharp price increases in early 2026

Sharp price increases in early 2026

The year began with major price hikes, especially in the Nordic futures market. Prolonged and severe winter cold spells across Europe were the main drivers.

When the European energy markets paused for the Christmas holidays, they left a relatively calm market. The gas market had fallen after a mild start to the winter. In the Nordics, prices were also relatively low due to a hydro balance surplus, and even December had not seen particularly high prices in delivery.

But all that changed last month.

January was dominated by a severe cold snap across Europe and especially the Nordics, sending both electricity and gas prices soaring. The cold winter weather and the resulting high consumption, especially in the northern price areas, led to a sharp deterioration in the hydro balance, which naturally affected electricity prices. Unsurprisingly, in the Nordic futures market, the closest contracts were the hardest hit. The system future for the next quarter, Q2-26, has increased by no less than 75% in price during the month, from 30 EUR/MWh to 53 EUR/MWh. Annual contracts have been slightly less affected, and the 2027 future has just had a 6% increase this month.

Prices on the spot market have also been sky-high. The average system price for January was 103.37 EUR/MWh, 95% higher than December, and the most expensive month since the extreme times of the 2022 energy crisis. Even across the respective price areas, these were the highest levels in years. It is worth noting that the weather in the Nordics has been relatively colder than it has been in Germany, although the Germans have also had a cold start to the year. This means that the price spread between Germany and the Nordics was particularly low at the beginning of the year, resulting in low EPADs in deliveries in Denmark.

Forecasts indicate that the icy winter weather will continue for at least the first half of February.