Europe's Gas Price Forecasts Fail to Account for Unpredictable Market Forces
Europe's energy strategy is built on shaky ground due to its reliance on gas price forecasts. These models are often overly optimistic, assuming a smooth and predictable future for natural gas prices.
The latest Dutch Climate and Energy Outlook (KEV 2026) predicts that wholesale gas prices will settle at around €0.20, €0.25 per cubic meter through much of the 2030s. However, current market conditions are far from this prediction, with Dutch TTF gas trading at approximately €72 per megawatt-hour in late September 2026, equivalent to around €0.70 per cubic meter.
Gas prices depend on a multitude of factors, including weather, storage levels, Asian demand, LNG export capacity, pipeline failures, sanctions, wars, shipping routes, currency movements, and the behavior of a relatively small number of suppliers. This makes it nearly impossible to accurately predict future gas prices.
Policymakers often treat these forecasts as a fixed target, comparing investments against them as if uncertainty were minor. However, this approach is misguided, as gas is not just another input with a predictable inflation curve. Its price is influenced by complex and unpredictable factors that can cause market volatility to skyrocket.
The European Environment Agency calculated that gas-price volatility added approximately €13 billion to the EU's wholesale electricity bill during the first 16 weeks of 2026 alone. Renewable capacity installed since 2010 saved an estimated €29 billion over the same period compared with a system in which renewable deployment had stalled.