European electricity markets entered a stronger pricing phase in the first half of 2026, with average six-month prices exceeding €60/MWh across most major markets. Italy recorded the highest average price at €127.18/MWh, followed by the United Kingdom at €107.27/MWh. Meanwhile, Portugal and Spain remained the most competitive markets, with average prices of €48.77/MWh and €49.83/MWh, respectively.
Compared with the second half of 2025, electricity prices increased in most European markets analysed. The Nordic market registered the strongest growth, with prices rising by 82%, while the United Kingdom recorded a 27% increase. In contrast, Spain and Portugal experienced price declines of 28% and 29%, supported by stronger renewable generation and improved supply conditions.
Year-on-year comparisons also showed a broad upward trend, with most markets recording higher average prices. The Nordic region again led the increase, with prices rising by 120%, reflecting the combined impact of demand changes, generation patterns, fuel market developments and regional differences in renewable availability.
Renewable generation continued to reshape Europe’s electricity system, with solar photovoltaic production increasing year-on-year in all major markets. Spain and France recorded the largest growth rates, both at 16%, while Germany, Spain, Italy and France achieved record half-year solar generation levels. The continued expansion of solar capacity is improving daytime electricity supply but is also increasing the need for storage, flexible generation and grid management solutions.
Wind power production also increased across all analysed markets compared with the first half of 2025. Italy recorded the largest rise at 17%, followed by France and Germany. France, Italy and Portugal reached new half-year records for wind generation, highlighting the growing importance of renewable sources in Europe’s electricity mix.
Electricity demand also strengthened across much of Europe. Belgium recorded the largest year-on-year increase at 6.1%, while consumption rose in most markets compared with the previous six-month period. Spain was among the exceptions, registering lower demand. The recovery in consumption added further pressure on power systems already undergoing major changes due to increasing renewable integration.
Energy commodity markets remained a key factor influencing electricity prices. TTF front-month gas futures on the ICE market averaged €42.94/MWh during the first half of 2026, representing the highest six-month average since the second half of 2023. Lower European gas storage levels and geopolitical tensions, including developments involving the United States and Iran, contributed to stronger gas market conditions.
Brent crude oil futures for the front month on ICE averaged $87.60 per barrel, reaching their highest level since the first half of 2023. The increase reflected ongoing supply concerns, geopolitical uncertainty and wider volatility across global energy markets.
Meanwhile, EU carbon allowance futures for December 2026 on the EEX market averaged €77.13/t. Although this was 2.4% lower than in the previous six-month period, prices remained 3.4% above the first half of 2025, highlighting the continued influence of Europe’s decarbonisation policies and emissions trading framework on energy markets.
According to AleaSoft, the first half of 2026 demonstrated a European power market increasingly shaped by the interaction between higher renewable penetration, evolving demand patterns, fuel market conditions and the growing importance of flexibility resources, AleaSoft reports.
