Market update September: power for 2027 up 17 percent in four weeks

Power for delivery across the whole of 2027 now costs € 117.90 per MWh. At the start of August it was € 101.04. Gas for 2027 went from € 41.96 to € 52.29 over the same four weeks. The idea behind prices like these is simple: the market already puts a figure on gas and power that will only be delivered next year, and that figure moves every day with what happens in the world. In August it moved the same way for four weeks in a row, and that way was up.

For you this is not stock market theatre. Anyone who fixed a contract for 2027 in July is now almost € 17 per MWh below today’s price. At a consumption of 1,000 MWh that is close to seventeen thousand euros over the year, and on the invoice it comes down to 11.8 cents per kilowatt hour against 10.1 cents in July. So if you still have to choose, you are not choosing between good and better, but between a price that is high today and a price that could be higher tomorrow.

Storage is the whole story

Dutch gas storage was 47.3 percent full on 31 August. On exactly the same day last year it was 64.8 percent. The idea is simple: from April to 1 November we put gas into storage underground, and in winter we take it out again to keep ourselves warm. So there is now well over a quarter less in there than last year, with two and a half months of filling to go.

How full Dutch gas storage was, this year against last year. Since April the gap has not narrowed but widened: from sixteen percentage points to seventeen and a half.

Across Europe the picture is the same, only less sharp. European storage was 65.4 percent full at the end of August, against 77.7 percent a year earlier. It has never been this low at the end of August, and Europe has been keeping track of this for sixteen years now. Even 2021, the year in which prices went on to spiral completely, was slightly better placed at 67.3 percent.

The European level on 31 August, for every year since 2015. In the good years there was well over ninety percent in storage. This year sits at the bottom of the entire series.

This is not a figure for the statistics. Gas that is not underground on 1 November has to be bought on the day in January, precisely when it is at its most expensive. In August an average of 0.48 billion kilowatt hours a day went into Dutch storage, slightly less than in July. If the market keeps up that pace, Dutch storage will go into winter at around 68 percent and European storage at around 82 percent. That is enough for a normal winter and too little for a cold one.

Why gas is not arriving any faster

Europe fills its storage largely with gas that arrives by ship. That gas is cooled to 162 degrees below zero in the country it comes from. At that temperature natural gas turns liquid and takes up six hundred times less room, and then a full cargo does fit into a ship. Liquefied natural gas is called LNG, and the ships that carry it are called LNG carriers.

One of the largest suppliers in the world is Qatar, and every LNG carrier leaving there has to pass through the Strait of Hormuz. That is the strait between Iran and Oman, a good thirty kilometres wide at its narrowest point, and for Qatar there is no other way out to open sea. That is exactly where things are going wrong now. The United States and Iran are firing on each other in and around that strait, and an oil tanker has hit a mine. Oil tankers do still sail through, six to eight million barrels a day against roughly twenty million before it became unsafe. But the owners of LNG carriers keep their ships away far more often. So part of the gas Europe was counting on simply does not arrive.

So why do those LNG carriers not simply follow in the wake of the oil tankers? With oil the cargo is transferred en route to a second ship waiting beyond the dangerous stretch. With liquefied gas that is almost impossible, because you do not simply transfer cargo at 162 degrees below zero on the open sea. On top of that there are roughly nine hundred LNG carriers worldwide against nearly nine thousand oil tankers. That fleet is too small to absorb long detours. And in August there was maintenance at a number of Norwegian gas installations, and Norway is Europe’s largest supplier by pipeline.

There is a bright spot too. Because gas is expensive in Europe right now, it is more attractive for the ships that are sailing to unload here than in Asia. Supply is therefore picking up slightly. That does not remove the shortfall, it slows it down.

What the market is asking for 2027

At the start of August prices for the later delivery years were still falling. Since the middle of the month they have risen three weeks in a row, and ever more steeply.

Prices for delivery across the whole of 2027, in euros per megawatt hour, as they stood at the end of each week.

So in three weeks € 11.43 per MWh went on top of the power price for 2027 and € 6.90 on gas. For a company taking 5,000 MWh of power a year that is well over fifty thousand euros of difference, purely from the moment at which you sign.

Prices per delivery year in euros per megawatt hour, with the change over the last week. The further out in time, the smaller the movement: 2029 gained just 1.45 on top.

That last column is the most interesting part of the table. The market attributes the tightness mainly to next year and much less to 2029. Put differently: it expects this to be temporary. For you that means something practical. A one year contract buys you the most expensive part of the line. A contract that runs on further dilutes that expensive winter with years the market itself rates lower.

Power: the most expensive August in years

The Dutch power price averaged € 125.41 per MWh in August, against € 105.86 in July. Since the start of 2023 only three months have been more expensive: January and February 2023 and February 2025, so all three in the depths of winter. The reason is simple: when gas is expensive, power from gas fired plants becomes expensive, and Europe needed those plants badly in August. Hydropower in the Alps could deliver little because of the drought, and the nuclear plants in France were not running at full strength.

This is not only a story about prices, it also shows in what was actually running. The Dutch coal fired power plants produced 1,577 gigawatt hours in August, against 885 in August last year and 399 in 2024. Almost a doubling in one year, and the most since 2022.

What the Dutch coal fired power plants produced in August. After 2022 it dropped to almost nothing; this year it is back close to the level of the crisis years.

The gas fired plants here actually ran slightly less than last year. That sounds contradictory, but it is exactly what you would expect: including the CO₂ allowances, coal became cheaper than gas, so the coal plants were the first to step in. In other words, in the Netherlands there was a choice to make, and that choice fell on coal.

Across Europe there was no choice to make. Coal fired plants there produced 20 percent more than in August last year and gas fired plants 23 percent more, so both at the same time. Hydropower dropped away because of the drought and the French nuclear plants were not running at full strength, so there was no room to trade one off against the other. Everything that could run had to run, and that is exactly why the price stayed so high.

But the average does not tell you where you feel the bill. That sits in the shape of the day.

What a megawatt hour of power cost on average, by hour of the day. The midday dip comes from the sun, the evening peak from the moment the sun goes and everyone comes home.

At one in the afternoon, power cost an average of € 30.75 per MWh in August. At eight in the evening it was € 201.34, well over six times as much. On 53 hours in the month the price was even negative: you were paid to use power. On 33 hours it was above € 200. The most expensive hour was 13 August at around eight in the evening, at € 338.86 per MWh, or 33.9 cents per kilowatt hour.

If you pay a fixed price you notice none of this and simply pay the average plus the margin the supplier charges for that risk. If you are on the price of the moment, or can shift production, that € 170 per MWh difference is yours to use. A cold store that chills down extra at three in the afternoon and does nothing at eight in the evening earns real money in this market.

What this means for your procurement

In short

August was the month in which the market decided that empty gas storage is a real problem and not just a concern. Power for 2027 became 17 percent more expensive in four weeks, gas a quarter. European storage has never been this empty at the end of August, and the filling is not speeding up. As long as supply by ship keeps faltering, the price will move up rather than down.

That is no reason to sign a contract in a panic today. It is a reason to know which purchasing moments you still have open, how your consumption is spread across the day and what a cold January does to your bill. We work that through for you, with your own figures.