Europe’s power prices plummet as gas-driven heating season comes to end

European utilities have increased natural gas-fired power generation following a 15% year-on-year decline in total wind farm output during the first quarter of 2025.

Between January and March, total gas-led power generation rose by 7% compared to the same period in 2024, reaching 332 terawatt-hours. 

Growing gas consumption has raised its share in Europe’s electricity generation from below 24% in the first quarter of 2024 to 26% in the first quarter of 2025. The heightened winter demand further increased reliance on gas, pushing prices up by 20% in the first eight weeks of the year. As a result, electricity suppliers had to pass on higher gas procurement costs to consumers.

Gas-fired power generation in Europe during the March-June period has declined by 25% over the past three years. A similar reduction in 2025 is expected to push fuel prices lower, easing costs for electricity suppliers.

Total gas purchases are set to drop significantly compared to the first quarter of this year, alleviating upward pressure on prices and ultimately reducing electricity costs for end consumers.