AleaSoft Energy Forecasting, September 2, 2026. Electricity futures have risen sharply in Europe over the summer, amid geopolitical tensions in the Middle East and rising gas prices. The rise increases hedging costs for large consumers and electro-intensive industry, while higher price curves may improve the bankability of renewable PPAs.
Rise in electricity futures prices
Electricity futures prices have increased considerably in recent months in the main European markets, driven by the rise in gas prices. The crisis in Iran and the uncertainty surrounding the Strait of Hormuz maintain a significant risk premium in the energy markets.
In Spain, the electricity futures contract for the fourth quarter of 2026 stood at €91.20/MWh at the end of May. On August 31, its settlement price on OMIP reached €127.25/MWh , an increase of close to 40% in just three months.
The trend has been similar in other major European electricity markets. In Germany, the fourth-quarter futures contract rose from €116.42/MWh at the end of May to €154.64/MWh on August 31, an increase of around 33%. In Italy, the rise was close to 40%, from €136.15/MWh to €190.11/MWh .
Contracts for September delivery also ended August at high levels: €135.75/MWh in Spain, €146.40/MWh in Germany and €195.20/MWh in Italy.
The upward pressure continued at the start of September. On September 1, fourth-quarter 2026 electricity futures reached €132.00/MWh in Spain, €159.39/MWh in Germany and €195.56/MWh in Italy. Compared with the August 31 close, these values represent increases of 3.7%, 3.1% and 2.9%, respectively, confirming that the upward trend continued into the start of the new month.
Upward pressure extends to 2027
The upward trend also reaches the first quarter of 2027. In Spain, the electricity futures contract for the first quarter of 2027 rose from €85.73/MWh at the start of August to €106.25/MWh on August 31, an increase of close to 24%. In Germany, this product rose from €127.34/MWh to €149.42/MWh over the same period, an increase of 17%, while in Italy it rose from €146.41/MWh to €171.14/MWh , a rise of 17% as well.
At the start of the last four-month period of 2026, on September 1, this futures contract rose to €110.20/MWh in Spain, €154.62/MWh in Germany and €176.51/MWh in Italy, with increases of 3.7%, 3.5% and 3.1%, respectively.
Source: Spain electricity futures for Q1‑2027 on the OMIP Market available in Alea Energy DataBase.The influence of gas prices
The rise in gas market prices explains much of these movements in electricity futures across European markets. The TTF gas futures contract for the next quarter rose by around 22% during August, and the futures contract for the following year by approximately 25%.
For gas futures, prices also continued to rise at the start of September. The quarterly futures contract rose by 3.4%, to €71.87/MWh, between August 31 and September 1, while the annual contract rose by 2.6%, to €52.29/MWh.
Source: TTF gas futures for the Front‑Quarter on the ICE Market available in Alea Energy DataBase.
Higher hedging costs for large consumers
The rise in futures curves increases hedging costs for the coming months and years, amid high price volatility and geopolitical risk. Having price forecasts and analysing different scenarios is key to the purchasing and hedging strategy, since delaying decisions in a rising market can result in much higher costs.
An opportunity for renewable projects and PPAs
The same scenario that increases hedging costs for consumers improves the price references used in negotiating PPAs. Higher expectations can increase the projected revenues of renewable projects and make it easier to close long-term contracts on more favourable terms, with a positive effect on bankability. However, the high volatility requires structuring PPAs with a long-term view, not only with current risk premiums.
Two sides of the same scenario
Electricity and gas futures confirm two sides of the same European energy scenario, higher hedging costs for those who buy electricity and better revenue prospects for those who develop renewable energy. In both cases, price forecasts are the tool for deciding in a market marked by uncertainty.
The role of market forecasts: AleaBlue
AleaBlue, the division of AleaSoft Energy Forecasting specialising in short- and medium-term electricity market forecasts, produces price forecasts and scenario analysis so that energy retailers, traders, utilities and large consumers can anticipate futures movements and adjust their buying, selling and hedging strategies.
Source: AleaSoft Energy Forecasting