Spot Markets and CO2 Tax Are Driving Europe’s Energy Price Inflation

Futures traded at the Title Transfer Facility (TTF) in the Netherlands drove the price of natural gas per MWh up from just under €17 on Jan. 4, 2021, to more than €100 at last count for delivery at the end of next February. That was a record increase of almost 600%. By way of comparison, the price for a MWh normally has ranged €15-€20 on average, over many years. But a look at the quotations for delivery dates set by futures, for even after the winter heating season, shows that these times for low prices are over for now: With prices of almost even €60 for deliveries at the end of June, natural gas will remain three times as expensive as the long-term average in the summer of 2022. The current price for gas traded for immediate payment for short-term delivery is at €175/MWh, a new all-time high.