European Utilities: How much do utilities benefit from the high power price environment?

This report assesses the potential earnings upside for European utilities following the sharp increase in power and gas prices triggered by geopolitical developments in the Middle East. European gas storage remains well below comfortable levels, raising the risk of supply shortages this winter and potentially extending market tightness into summer 2027, while forward power curves have moved materially higher, with the largest increases concentrated in 2026-28. Power price exposure is dispersed but moderate for integrated utilities, whose structural merchant exposure is partially offset by a natural hedge from retail customer bases;