The correlation between electricity and natural gas prices throughout Europe

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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.

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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