The European Central Bank has published an analysis finding that the 2026 energy price shock has so far been smaller than the 2021-22 crisis and has produced more limited increases in wholesale gas and electricity prices. Higher renewable electricity generation has weakened the link between gas and wholesale electricity prices, although the effect varies across countries according to their generation mix and the frequency with which gas sets the marginal electricity price. Wholesale gas price changes are now passing through to Harmonised Index of Consumer Prices gas inflation more quickly, reflecting greater retail market liberalization and more flexible contracts. A Eurosystem survey found that pass-through is expected within one to three months in more than half of the euro area, while the share reporting a 13 to 24-month lag has fallen from around 40% in 2022 to about 5%. Electricity price pass-through remains more widely distributed and broadly unchanged from 2022, while taxes, charges, contract structures and national price-setting mechanisms continue to limit and delay transmission to consumers.
2026-09-21European Central Bank
European Central Bank finds smaller 2026 energy shock, weaker gas to electricity price transmission and faster retail gas pass-through
The European Central Bank found that the 2026 energy shock has so far been smaller than the 2021-22 crisis, while increased renewable generation has weakened the link between gas and wholesale electricity prices. Wholesale gas prices are feeding through to consumer gas inflation more quickly, but electricity price pass-through remains uneven and broadly unchanged from 2022.