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Energy Studies | 6th Oct, 2023

The correlation between electricity and natural gas prices throughout Europe

Europe's shift towards renewables, driven by the volatility of fossil fuels, brings the relationship between natural gas and day-ahead electricity prices to the spotlight. 

Reading time : 2 min

Written by

Tomás Oliveira

Electricity and natural gas intertwine as both competitors and allies. They play dual roles in energy production and domestic/commercial applications.


Influencing factors

A nation's energy mix often dictates the correlation intensity with TTF prices. Therefore, countries deeply anchored to natural gas tend to resonate more with TTF price shifts. Furthermore:
- Energy diversification can buffer against gas price swings.
- Shifting energy policies, particularly leaning towards renewables, can accentuate this correlation.
- Infrastructure, both in storage and distribution, weighs in this dynamic.


Correlation between day-ahead prices and natural gas prices in European countries


Data breakdown

Strong correlation:
Italy, Hungary, Slovenia, Slovakia, and the Netherlands stand out due to their geographic positioning, infrastructure, energy stances, and European market integration.

Moderate correlation:
Countries like Germany and the Baltics (Estonia, Finland, Lithuania, Latvia) present a balanced interplay, with other energy sources or local dynamics softening the TTF's impact.

Low correlation:
Portugal and Spain, with their distinct energy strategies, display a milder correlation, signaling robust buffers against gas price spikes.


Final thoughts

Deciphering the correlation between gas and electricity prices across Europe is a layered task, influenced by a country’s energy mix. In our sustainability-driven times, understanding these intricacies becomes pivotal for a resilient European energy future.


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