Common Questions

Why does IEEFA say gas still drives EU electricity prices despite more renewables?

IEEFA's April 2026 analysis found that gas, while only 18-20% of EU generation, still sets day-ahead prices at EUR 120-150/MWh across Italy and Germany on low-wind days because the marginal merit-order design prices the entire market at the cost of the last (most expensive) unit dispatched.Source: IEEFA

What is IEEFA and is it independent?

IEEFA (Institute for Energy Economics and Financial Analysis) is an independent non-profit research body headquartered in Ohio. It is not affiliated with any government or major energy company and publishes critical analysis of fossil fuel economics and power market structure.

Has the Hormuz crisis raised European household electricity bills?

IEEFA's April 2026 analysis concluded that the Hormuz disruption has transmitted directly to household electricity bills even in high-renewables grids, because gas-fired peakers set clearing prices on low-wind days at EUR 120-150/MWh across Italy and Germany.Source: IEEFA

Background

IEEFA (Institute for Energy Economics and Financial Analysis) is an independent non-profit research institute headquartered in Lakewood, Ohio. It publishes critical-leaning analysis on energy economics, power market structures, and fossil fuel financial risk. Funding is philanthropic; IEEFA has no government or industry affiliation.

IEEFA's April 2026 analysis found that gas, representing only 18-20% of EU electricity generation, sets day-ahead clearing prices at EUR 120-150/MWh across Italy and Germany on low-wind days. The institute's key finding is structural: diversifying gas suppliers does not reduce price exposure because gas-peaker clearing is a market design issue, not a supply-side one. IEEFA's analysis supports the case for EU power market reform, particularly contracts for difference and demand-response mechanisms.