Electricity prices in Europe rose in March due to a sharp increase in gas prices

Average monthly wholesale day-ahead electricity prices in Europe rose in March 2026 amid a sharp increase in gas prices, with markets showing significant disparities.

March trends

According to Ember, as of April 3, 2026, they stood at:

• Italy – €143.7/MWh (+25.8% MoM);
• France – €64.02/MWh (+36.3%);
• Germany – €99.37/MWh (+2.7%);
• Spain – €42.83/MWh (+160%);
• Sweden – €50.82/MWh (-50.2%).

As AleaSoft notes, in March, imbalances intensified in the major European electricity markets due to the dominance of different types of generation during this period, while prices were affected by a significant rise in gas prices amid the escalation of the conflict in the Middle East.

Thus, in the first half of the month, average weekly prices in most European countries exceeded €80/MWh, with the exception of Spain, Portugal, and Northern Europe. At the same time, Italy recorded the highest figures. By the end of March, average weekly prices in most major European markets were falling amid declining TTF futures prices and rising volumes of solar and wind generation. The Iberian market recorded the lowest values in the fourth week of the month, with daily prices below €10/MWh.

According to a Wood Mackenzie forecast released in mid-March, gas supply disruptions caused by the war with Iran will lead to prolonged volatility in European electricity markets, and TTF futures prices exceeding €50/MWh will affect electricity costs in most countries.

Although the European energy sector is less dependent on gas, Europe’s ability to switch to coal-fired generation has declined sharply since 2022. Gas-fired power plants continue to set prices in Italy, the UK, and to a lesser extent in Germany, as they remain a critical component for system balance.

European response

Against the backdrop of the new energy crisis, the European Commission has announced a series of measures in response. Specifically, the bloc’s executive body pledged to make state aid more flexible and to cooperate more closely with member states that are developing national schemes to mitigate the impact of fuel costs on electricity production. This was announced by European Commission President Ursula von der Leyen following the EU leaders’ summit on March 19.

The second component will be the grid fee, which averages about 18%—member states will be allowed to lower it for energy-intensive industries, and a legislative proposal will be prepared to improve the efficiency of grid infrastructure.

The third component of prices is taxes and levies on electricity, which average about 15% across the EU, with the situation varying by country. The EC will propose lower tax rates on electricity and plans to ensure that it is taxed less than fossil fuels. In the context of rising energy prices, the EC also announced steps to reform the Emissions Trading System (ETS).

In early April, European Commissioner for Energy Dan Jørgensen noted that Europe must prepare for a prolonged energy shock caused by the war in the Middle East. According to him, the bloc is evaluating all options, including fuel rationing and releasing more oil from emergency reserves.

European countries have already begun taking steps to mitigate the consequences of the war in Iran and its impact on households and businesses. For example, the government of Spain—a country better prepared for such a shock, not least thanks to renewable energy—approved an ambitious package of 80 emergency measures worth €5 billion at the end of March. Specifically, it includes an 80% reduction in grid fees for energy-intensive industries, which will result in savings of approximately €200 million.

The situation in Ukraine

According to «Market Operator,» the weighted average price of electricity traded on the day-ahead market (DAM) in Ukraine fell by 26% month-over-month in March, to 7,359 UAH/MWh (€145.1/MWh at the average monthly exchange rate of the hryvnia to the euro).

According to ExPro Electricity’s monitoring data, in March 2026, Ukraine reduced electricity imports by 25% compared to the previous month—to 942,000 MWh; compared to the same period last year, imports increased 3.4-fold. Hungary continues to account for the largest share of imports—48%, followed by Romania at 20%.

On March 13, changes to the regulatory conditions for electricity imports took effect. Specifically, the Cabinet of Ministers abolished the requirement for the largest state-owned companies—including Naftogaz of Ukraine, Ukrzaliznytsia, and defense sector enterprises—to import at least 50% of their electricity for their own needs. In addition, changes introduced in early March regarding the mandatory purchase of 90% of electricity imports relative to consumption for industry and business were repealed—the previous threshold of 60% has been reinstated.

In late March, the Association of Critical Infrastructure Operators stated that starting April 1, district heating companies (DHCs) across Ukraine would halt cogeneration and cease producing hundreds of megawatts of electricity. The reason is the changes the government made to Resolution No. 222 on March 30. According to these changes, only electricity producers operating in frontline regions and launching new cogeneration plants after December 1, 2025, will be able to purchase gas at a preferential price (19,000 UAH per 1,000 cubic meters). For other enterprises, gas subsidies have been retained only for the production of heat and hot water, as well as for the generation of electricity for their own needs.

The situation on the Ukrainian market remains very difficult, and prices for industry continue to be the highest in the EU. Rising electricity prices in the EU are also negatively impacting costs for Ukrainian steel producers.