EU Power Prices Decouple from Gas as Clean Generation Reaches 72%

European wholesale gas prices surged 88.4 percent between February and August 2026, yet electricity costs rose only 22.8 percent, a divergence the report attributes to the growth of clean generation. Between February and May alone, gas climbed 41 percent while electricity actually fell 7 percent. The Power Barometer 2026 attributes this decoupling to clean generation reaching 72 percent of the EU electricity mix.

Wind and solar supplied 30 percent of EU power in 2025, pushing fossil fuels below that same threshold. Carbon intensity fell to a record 182 g CO₂ per kWh, and gas plants are transitioning to a peaking role. June price spikes — driven by heat, weak wind and hydro output, and reduced nuclear availability. Restrictions on cross-border flows then kept cheaper power from reaching Hungary and Central and Eastern Europe during peak hours.

Battery storage is proving its value. Bulgaria’s 5.4 GW of batteries narrowed its price premium over the EU average from 21 percent in 2024 to 8.3 percent in 2026. EU operational battery capacity doubled to 11.2 GW in 2025, with a pipeline exceeding 80 GW, and Poland allocated 34.5 GWh through its 2025 subsidy tenders and capacity auctions. Yet total industrial storage at 64 GW — plus 78 GW under development — leaves the sector short of the 200 GW target for 2030.

Distribution grid operators are increasing investment 12.5 percent annually — from €36 billion in 2024 toward €48 billion by 2027 — while connection queues hit records and the prosumer count quadrupled between 2022 and 2025. Eurelectric identifies four persistent barriers: double taxation of stored electricity, authorization rules calibrated to large conventional stations, connection queues that do not assess project maturity, and fragmented ancillary markets across all 27 member states. The European Commission has opened proceedings against 26 countries for RED III transposition delays.

Source: pv Europe