In 2026, the cost of natural gas on the European market increased by 120%, and the level of underground storage filling proved to be the lowest in recent years. This creates serious risks for the continent's energy stability during the heating season. This was reported by Ukrinform citing Euronews, according to the portal PromPolitInform.
The cost of Dutch TTF futures, which serves as the primary market benchmark, reached 63.7 euros per megawatt-hour as of August 18. While this is a significant price increase, it remains well below the peak levels of the 2022 energy crisis, when gas prices reached 350 euros.
Factors influencing energy shortages
The process of storing gas for the winter has been complicated by several external circumstances. Specifically, these include the closure of the Strait of Hormuz and prolonged production halts at Norwegian gas fields. Additionally, the market is under pressure from the consequences of heatwaves: reduced efficiency of hydropower and nuclear power plants necessitates increased reliance on gas-fired generation.
Despite energy efficiency measures that have reduced EU gas consumption by 15-20% compared to 2021, vulnerability to cold snaps remains high. Avoiding aggressive gas procurement is only possible if significant stocks are available, yet as of August 1, storage levels stood at only 57.1%.
Flexibility in filling storage facilities
Although EU regulations mandate a 90% storage filling target, current market challenges have prompted regulators to provide countries with more time to meet these requirements. The deadline for fulfilling this goal may now be shifted from October 1 to December 1.
Federal Minister for Economic Affairs and Climate Action of Germany Katerina Reiche is considering the use of federal budget funds to establish a strategic gas reserve amidst the shortages. This model could replace the current financing system, which relies on additional levies imposed on industrial and household consumers.
Illustrative photo: MB-one / CC BY-SA 4.0
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