Cold weather could push gas and electricity prices sharply higher
Tuesday 6th October 2026 on 22:00 in
Estonia
A cold winter could drive gas prices sharply higher and also raise electricity costs, energy expert Marko Allikson warned on ERR’s Esimene stuudio programme.
The European Union’s average gas storage level is about 10 percentage points below its usual level ahead of winter. Storage facilities are currently 73% full, Allikson said, adding that supplies in the region should be sufficient and that Europe should be able to meet demand even under current conditions.
The crisis around the Strait of Hormuz has reduced gas supplies and pushed prices higher. Natural gas costs about twice as much as a year ago, and a colder-than-average winter could increase prices further, Allikson said. He said the main concern was the cost of gas, not a shortage, as production is sufficient and Europe can pay more than other regions.
Electricity prices will also depend heavily on winter temperatures. Futures prices for the first quarter of next year put Finland at about 100 euros per megawatt-hour and Lithuania at 150 euros, with Estonia likely between them, at around 130 to 140 euros, Allikson said. But he cautioned that futures prices are not a reliable prediction of actual costs: during a prolonged cold spell last winter, electricity prices in January and February exceeded 150 euros per megawatt-hour, despite forecasts of about 100 euros.
High gas prices can push electricity costs up on cold days when there is little wind or sunshine and power must be generated using fossil fuels. Gas-fired electricity could cost close to 200 euros per megawatt-hour when gas is priced at 76 euros per megawatt-hour, he said.
Electricity prices also depend on whether Estonia’s power connections with Finland are operating. Estonia imports about 40% of the electricity it consumes, Allikson said, identifying the Estlink connections as a key risk if they fail.
Estonia is among the Baltic countries leading in battery installations, which can help bring down electricity price peaks. Allikson said battery storage can also affect price troughs, including negative prices, which have been less common this year than last year.