Energy Market 2025 in Perspective: From volatility to resilience

2025 was a year in which the energy markets continued to stabilize. The market remained sensitive to weather conditions, geopolitics and short-term disruptions, but moved within far more predictable boundaries. The price development of electricity, gas and CO₂ reflects this. Volatility certainly occurred, especially in the first quarter, but the underlying trends of 2025 show a market moving toward recovery and a new equilibrium.

Read the year overview below for a summary of the key events and performance indicators that shaped 2025.

Electricity: A volatile start followed by a long period of stability

Electricity forward prices in 2025 showed a clear two-part pattern, especially for the CAL-2026 contract. In the first months of the year, prices rose sharply, with moments well above €100/MWh. For the CAL-2026 forward curve, the main driver of this move was higher gas prices which was driving up the generation costs of gas fired power plants. This reflects how forward power pricing remains closely linked to the marginal cost of thermal generation and broader fuel market expectations.

From March onwards, a sharp correction set in, with prices falling back toward €85/MWh. This was again driven by gas prices which declined significantly at the end of Q1-25 and remained volatile afterwards. It was not until August and September that price movements began to flatten more clearly, with electricity prices settling into a narrower and more stable range. This indicates that the market required several months to fully absorb earlier price pressures before stabilizing.

Peak (€/MWh)

From August onwards, the picture became even calmer. Base and peak prices fluctuated within a narrow band of approximately €80–90/MWh.
The first quarter was dynamic for electricity prices; the remainder of the year was notably steady and predictable.

Gas (€/MWh)

Gas: Brief volatility followed by a structural downward trend

Gas prices showed a familiar pattern. In January and February, prices increased rapidly, with a high for Cal-26 around €45/MWh. This period of volatility was short-lived. From March onwards, a clear downward trend emerged and defined the remainder of the year.

The chart shows that temporary price increases—particularly in spring and summer, were consistently corrected. Confidence in gas availability and the supply of LNG (delivered by ship) remained strong, giving the market sufficient buffer to absorb short-term uncertainty. In the autumn, prices became even more stable. All delivery years moved toward the lowest levels of 2025: around €27–30/MWh for 2026/2027 and slightly lower for 2028.

Gas prices in 2025 were characterized by a brief volatile start and an extended downward trend, supported by strong fundamentals and calm conditions in the wholesale market.

CO₂: A Clear v-shaped pattern with strong recovery

The CO₂ price movement in 2025 where in the first half year very similar as gas. This can be explained by the fact that fuel switching from coal to gas, one of the cheaper CO₂ abatement options, has a direct relation with the gas price. In the first quarter, EUA prices rose quickly toward €85. A sharp decline followed in April, with prices dropping below €70.

In the second half of 2025 prices gradually increased while gas prices where in decline. This suggests that market participants anticipate a tightening in the supply-demand balance of the carbon market. By the end of the year, CO₂ prices were again close to €85, almost matching the peaks seen at the start of 2025.

CO2 (€/MWh)

Importantly, the year did not end in a “stabilized mid-range”: by year-end, CO₂ prices had recovered back toward the upper end of the annual range, reaching levels close to the year’s high. This V-shaped profile reflects shifting expectations around economic activity, energy demand and developments within the European emissions trading system.

Weather, supply and demand: noticeable but not dominant factors

While forward curves are primarily shaped by expectations, fuel-linked costs and risk premia, spot markets in 2025 provided clear reminders of how weather-driven system tightness can create extreme hourly outcomes. Periods of low wind and low solar output (dunkelflaute) contributed to tight conditions and price spikes when flexible supply was needed. During the summer we observed a record number of negative spot prices. On the other side periods of heat and low wind also contributed to sharp spot price movements, sometimes referred to as (hitzeflaute), highlighting the increasing relevance of weather patterns beyond the traditional winter risk narrative. Consequently, we observed significant hourly price volatility, with negative prices occurring during solar hours, followed by price surges of several hundred euros in the evening.

These events are not always directly visible in annual forward price charts, but they matter for market confidence and for the valuation of flexibility. Hydropower conditions in Scandinavia and the availability of conventional generation also influenced market sentiment at times, mainly through perceived system buffers and regional price coupling, rather than through persistent directional shifts in the forward curve.

Market dynamics: From volatility to greater predictability

While the market ultimately proved more predictable than in 2024, this was not consistent throughout the entire year. The first half of 2025, particularly for the CAL-2026 power contract, was characterized by elevated volatility, in some periods even exceeding that of CAL-2025. Price build-ups during this phase were followed by corrections, but these often required time to fully materialize. It was primarily in the second half of the year that the market showed clearer signs of stabilization, with faster normalization after price increases and a more predictable trading pattern.
Overall, 2025 was a year with:

fewer extreme movements,
faster normalization after price build-ups,
and a market driven more by structural factors such as demand, supply and weather conditions than by incidental disruptions.

This created an environment in which strategic decisions could focus more on optimization and less on managing acute volatility.

Outlook

The developments of 2025 show that the energy market has entered calmer waters, though it remains sensitive to international developments and weather-dependent generation.

In 2025, the ability to provide direction mattered more than reacting. This fits our approach and our role within the energy system.

In the period ahead, the market will remain influenced by international supply, CO₂ developments and weather conditions. But the foundation laid in 2025 provides confidence: the market has become more stable, more predictable and increasingly driven by structural factors rather than sentiment.

We will continue to monitor these developments closely and translate them into choices in production, flexibility and portfolio steering. In doing so, we strengthen an energy system that is reliable, affordable and prepared for the future.

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