Key facts
- European energy models often use a central gas price path that assumes prices will settle around €0.20-€0.25 per cubic meter through the 2030s.
- In late September 2026, Dutch TTF gas was trading at approximately €72 per megawatt-hour, or about €0.70 per cubic meter.
- Policymakers are cautioned against treating model price pathways as definitive futures, as gas prices are influenced by numerous unpredictable factors.
- The European Environment Agency calculated that gas-price volatility added approximately €13 billion to the EU’s wholesale electricity bill in the first 16 weeks of 2026.
- Renewable energy investments are presented as a hedge against gas price volatility, with most costs known upfront and no fuel purchase required.
- Governments are advised to consider investments that remain sensible across a wide range of gas-price outcomes, including low, central, high, and shock scenarios.
Energy models often present a future of calm and stability, assuming an end to wars, smooth shipping, and manageable winters, with natural gas prices gradually returning to a comfortable level. However, Europe's experience over the past five years has highlighted the difficulty in predicting future gas prices.
The latest Dutch Climate and Energy Outlook (KEV 2026) uses a central wholesale gas-price path that assumes prices will settle around €0.20–€0.25 per cubic meter through much of the 2030s. This contrasts sharply with the approximately €72 per megawatt-hour (roughly €0.70 per cubic meter) at which Dutch TTF gas was trading in late September 2026.
While prices could indeed fall if LNG supply expands and demand weakens, the core issue is the fundamental unpredictability of gas prices. Factors such as weather, storage levels, Asian demand, LNG export capacity, pipeline integrity, sanctions, wars, shipping routes, and currency movements all play a significant role. For instance, Russian supply cuts in 2022 pushed TTF prices above €300/MWh, and more recently, Middle East tensions disrupted LNG flows, pushing European gas prices above €70/MWh by September 2026.
Energy models require a gas price assumption to calculate household bills, industrial competitiveness, and decarbonization costs. However, policymakers are cautioned against treating these model pathways as definitive predictions. The European Environment Agency estimated that gas-price volatility added approximately €13 billion to the EU’s wholesale electricity bill in the first 16 weeks of 2026 alone, while renewable capacity installed since 2010 saved an estimated €29 billion over the same period.
Renewable energy sources like solar and wind offer a different risk profile. While they have their own uncertainties, their costs are largely known upfront, and they do not rely on purchasing fuel at prices dictated by geopolitical events or weather. Investments in renewables, storage, and efficiency are seen as converting open-ended commodity risk into a portfolio of assets with more visible capital and operating costs. This strategy is valuable regardless of whether gas prices remain high or fall.