Europe's second gas shock tests Brussels' appetite for power market reform

Prices above €300/MWh in six markets

The gas price crossed €100 per megawatt-hour, Balkanweb reported. It was the first time in almost four years.

Wholesale electricity followed. Average prices reached €305.59/MWh in Poland, €314.85 in Germany, €310.71 in the Czech Republic and €310.42 in Austria, according to the same report. The same report put Hungary at an average of €324.58 and Serbia above €330. Evening peaks were far higher once solar output dropped. They reached €520/MWh in Romania, €540 in the Netherlands, €542 in Poland and €560 in Germany. Oil was trading near $115 a barrel at the same time.

Gas matters more than its share of final energy suggests. Its price sets electricity bills and industrial costs across the EU. The Centre for European Reform calls this the bloc's second major gas-price shock in four years. It warns against repeating the blanket support of 2022.

Storage is thinner and refilling costs more

EU gas storage was 75% full on 27 October. That compares with 91% in October 2022, according to the Centre for European Reform. EU rules require member states to reach 90% ahead of winter. They allow some flexibility when market conditions are unfavourable. The EU Agency for the Cooperation of Energy Regulators estimates that filling storage to 80% ahead of winter 2026-27 could add €10-15 billion to refilling costs. Those costs can reach consumers' bills. Compensation schemes land on public budgets. The Centre for European Reform notes LNG has changed the economics of gas storage. Storage relied on a predictable seasonal price spread.

Brussels offers fiscal room, not bill relief

Energy ministers met in Luxembourg. They put reform of electricity grid tariffs at the top of the agenda. Structural market changes will not deliver quick relief. The Commission sees no immediate risk to security of supply. What Brussels has offered instead is fiscal room. Member states can request permission to exceed agreed spending limits by up to 0.3% of GDP annually. The cap is 0.6% over 2026-28. That flexibility is explicitly intended for measures that reduce dependence on fossil fuels. It is not for short-term relief from high energy prices.

The Centre for European Reform argues support should be targeted at the most vulnerable. It says there is less fiscal room than in 2022.

The long-term tools are contested

The EU Emissions Trading System review proposal was published in July 2026. It is meant to turn the ETS into an "engine for innovation and investment". Transport & Environment argues the proposed framework is not fit for purpose for supporting clean fuel investment in aviation and shipping. The group wants 50% of national ETS revenues earmarked for decarbonisation in priority sectors, including aviation and maritime e-fuels. It also proposes a funding pool for e-fuels by 2028. It proposes double-sided auctions designed to enable final investment decisions.

Hydrogen planning has moved the other way.

ENTSOG's October 2026 draft assessment cut its 2030 hydrogen demand assumption from 620 TWh to 335 TWh. That is a 46% reduction. It cut its 2040 assumption by 33%, from 1,929 TWh to 1,296 TWh. Germany's approved hydrogen core network covers 9,040 kilometres. Expected investment costs are €18.9 billion.

The Centre for European Reform argues the EU must cut gas consumption. It must also cut gas's influence on prices through electrification, grids, batteries and demand response.

What to watch this winter

Governments can oblige suppliers to store gas. They can compensate them, or buy strategic reserves themselves. Which mix they choose will show up in bills and budget lines. It will show up there before any reform text. Whether the 90% storage target is met, and at what cost, is the first test. The ETS review and the hydrogen demand assumptions will shape investment decisions. That will last long after this winter.