Latest Market Update - May 2026
Wholesale gas and electricity markets have continued to be unsettled this week, with forward prices still reflecting a high level of uncertainty across Europe.
Forward‑curve graphs for gas, peak power and baseload power show that the market remains in backwardation – meaning prices for near‑term delivery are higher than those further out. In simple terms, the market is more concerned about supply risks over the next 12–24 months than it is about longer‑term pressures.
What’s driving gas prices
Gas markets remain sensitive to several ongoing factors:
The need to refill European storage ahead of winter
Strong global competition for LNG cargoes
Continued geopolitical tensions
Lower Russian gas flows into Europe compared with historic levels
What’s driving electricity prices
Electricity markets are following a similar pattern. Near‑term prices for both peak and baseload power remain elevated due to:
Reliance on gas‑fired generation
Carbon pricing
Tight generation margins
Although prices further along the curve are slightly softer, they are still well above historic averages. This suggests the market does not expect a quick return to lower wholesale prices.
Another notable trend is the narrower gap between summer and winter prices. Traditionally, winter carried a much higher premium due to increased demand. The flatter curve indicates ongoing caution around supply security and system resilience throughout the year.
What this means for public sector organisations
These market conditions continue to create challenges around:
Budget planning and forecasting
Deciding when to go to market
Managing exposure to price volatility
Coordinating multi‑site energy portfolios
Meeting renewable and sustainability commitments
We are currently supporting organisations with fixed, flexible and phased purchasing strategies, framework benchmarking, renewable procurement options and forward budget modelling for 2026 and 2027 renewals.
The market remains highly reactive to geopolitical events and wider commodity movements, so early engagement and structured procurement planning are more important than ever.
If you would like an updated market review or support in assessing your current procurement position, please contact us.