What’s shaping European power markets in 2026?

Europe has taken a bold stance on decarbonisation since the signing of the Paris Agreement in 2016 - and nowhere is that more apparent than in the continent’s power sector. Pioneering and sustained policy and regulatory support has helped drive major investment in new generation, energy storage, power networks and wider infrastructure. As a result, Europe stands as a global energy transition leader, with more than half of its power supply coming from renewables - and nearly two-thirds from low-emissions sources.

On the other hand, in contrast with other major markets, Europe has yet to see any significant increase in power demand this decade. The rise of data centres is driving surging demand growth in the US after many years of flat demand, and many Asian markets are seeing rapid growth as their economies develop; however, European power demand has yet to return to pre-pandemic levels. This situation threatens to hamper Europe’s ongoing energy transition, with lower wholesale electricity prices, nega-tive pricing events, low asset utilisation and curtailment all reducing profitability and increasing financial risk.

Given this unique scenario among major power markets, what can Europe expect in 2026 and beyond? Will renewables’ share of the generating mix continue to grow, or was April 2025’s major blackout in Spain and Portugal an indication that storage will need to be rolled out significantly before further market penetration is advisable? Will the need for flexibility secure a greater ongoing role for gas generation, and if so, what will this mean for power prices? And will negative power prices continue to be a feature of European power markets?

Discover the six factors shaping European power markets

For the answers to these and other questions, fill out the form on this page to download our insight 6 Factors shaping European Power Markets, which highlights the key drivers we expect to shape the industry in 2026.