Electricity prices in Europe could rise by up to 40%, warns head of Croatian transmission system operator

Electricity prices in Europe could rise by up to 40 % by the end of 2026, warns the head of Croatian transmission system operator HOPS. Current data from Czechia show that the market has stabilized after the energy crisis at a higher level than was typical before 2020, and remains sensitive to fluctuations in generation and demand.

Electricity prices in Europe could rise significantly again in the coming years. The head of Croatian transmission system operator HOPS, Frane Mervar, warned that wholesale prices could rise by up to 40 % by the end of 2026. The reasons are expected to include a combination of rising demand, the slow development of new sources of generation and structural problems in the European energy sector.

The situation in recent weeks has also been drastically affected by the closure of the Strait of Hormuz, which has significantly disrupted global natural gas supplies. In response, the benchmark European TTF contract rose by approximately 60 %. Gas price movements are a key factor for electricity prices in Europe, as gas-fired power plants often set the market price.

Mervar also warns that the European market has yet to fully recover from the 2021–2022 energy crisis. Although prices have fallen significantly from their peaks, they remain above the historical average and sensitive to fluctuations in generation and weather. According to him, a key problem is the insufficient pace of construction of new sources to replace retiring coal-fired power plants.

Current data from market operator OTE show that spot electricity prices in Czechia have been hovering around 2 000 to 2 300 Kč/MWh (approx. 80–95 EUR/MWh) in recent weeks. These are still elevated levels compared with the past. At the end of 2025, prices were mostly in the 70–90 EUR/MWh range, while in spring 2025 they fluctuated between 80–110 EUR/MWh. The difference is even more pronounced compared with the pre-crisis period—in 2018–2020, wholesale prices typically ranged from 40–60 EUR/MWh.

The current price level therefore represents a new standard for the European market. The market is also becoming increasingly volatile—for example, negative electricity prices are appearing more frequently during the spring months due to high generation from solar power plants, while prices can rise rapidly during periods of low generation.

Prices are set to continue rising, especially due to growing electricity consumption

According to Mervar, upward pressure on prices will continue, especially due to growing electricity consumption, partly in connection with the electrification of transport and industry. Mervar also points to insufficient investment in transmission infrastructure, which makes it more difficult to integrate new renewable sources. This could lead to more frequent market imbalances and price fluctuations.

Mervar also highlighted movements in forward electricity prices. According to him, the price of the 2027 contract rose by 26,4 % compared with its level in mid-February for the same delivery period. The increase for the 2028 contract was 11,3 %, while for 2029 it reached 6,3 %. According to him, price movements on the exchanges also suggest some stabilization in gas and oil prices in 2028, which is also reflected in expectations for the electricity market.

Short-term prices are another indicator of market tensions. On the Slovenian BSP SouthPool exchange, the day-ahead electricity price for April 2 reached 133,91 EUR/MWh, compared with 83,32 EUR/MWh on February 27, shortly before the conflict broke out.