EU gas and electricity markets from January to March 2025 proved their continued resilience as they ensured stable and secure energy supplies with important milestones on both markets. For electricity, while the wind sector and hydropower faced unfavourable conditions, solar power generation reached 45 TWh, a record level for the first quarter – some 30% higher than the same period last year. On the gas market, the end to the transit of Russian gas through Ukraine from 1 January led to a 45% drop in Russian pipeline gas relative to the previous quarter, and 39% down on the same period in 2024. This means that the U.S. has now overtaken Russia to become the EU’s second largest gas supplier (behind Norway). The colder than usual heating season saw higher gas demand for the quarter than in recent years, but prices were broadly kept in check thanks to the significant EU storage levels at the beginning of the quarter. The combination of higher gas prices and a higher share of gas power generation led to higher electricity prices compared with the first quarter of 2024. However, this was only short-lived and still lower than in 2023.
The gas market report confirms that further progress was achieved in the diversification of EU gas supply away from Russia and the structural change in imports. The end to Russian pipeline gas transit through Ukraine, meant that total Russian gas imports (including LNG) declined by 28% year-on-year and 27% quarter-on quarter. The volumes of Russian LNG imports remained stable compared to the previous quarter and declined 11% year-on-year. This change also further accentuated the shift towards more LNG imports (45% – relative to 38% in the previous quarter), while pipeline gas imports were reduced (55%, from 62% in Q4-2024).
The drop in temperatures in the first 3 months of the year – much lower than in the past 2 years, although still above the historical average – drove a 15% increase in EU gas consumption (to 119 bcm) compared to the previous quarter. Consumption grew by 8% year-on-year, indicating a possible halt in the structural decline of EU gas demand observed since 2021. Imports declined by 2% both quarter-on-quarter and year-on-year, while domestic gas production increased by 3% both quarter-on-quarter and year-on-year.
Norway remained the EU’s largest gas supplier with a share of 31% in total EU gas imports and provided 55% of the EU’s pipeline gas. The United States became the second largest EU gas supplier with a 24% share in EU imports and surpassed Russia, whose share dropped to 14% from 19% in Q4-2024 and Q1-2024. The U.S. provided more than half (53%) of EU LNG in the quarter. North-Africa (Algeria) increased its pipeline gas supply share to 21% from 19% in the previous quarter and 17% in Q1-2024 – the second biggest pipeline gas suppler after Norway, relegating Russia to third with 12%. Qatar remained an important LNG supplier (10%) to the EU and occupied the third largest position after Russia (16%) in EU LNG supply.
The upward price movement in wholesale gas price (observed already in Q4-2024) continued, driven by rapidly drawn-down gas storage levels combined with lower renewable production and geopolitical tensions. European wholesale prices averaged 47 €/MWh in the first quarter of 2025, an increase of 9% compared to the previous quarter and a 71% increase year-on-year. The monthly average price reached 48 €/MWh in January and 50 €/MWh in February, before falling back to 42 €/MWh in March 2025. Retail gas prices increased by 6% both in quarter-on-quarter and year-on-year comparison. The EU quarterly average retail price was 112 €/MWh.
The electricity market report highlights the contrast between the record solar power generation (45 TWh) and the exceptionally low wind generation for the first quarter due to the poor wind speeds. Wind generation declined year-on-year, with onshore wind dropping by 17% (-22 TWh) and offshore wind by 22% (-4 TWh). Hydropower also saw a 15% decrease (-16 TWh), albeit from very high levels in Q1 2024. This unusual combination – and the rise in gas demand because of the cold weather – meant that the renewable share of power generation decreased to 41% in the first quarter of 2025. This compares with 46% in the first quarter of 2024. A closer look at the figures shows that, after atypically weak generation in January and February, renewable output started to pick up again in March, indicating a positive trajectory for the upcoming months.
In contrast, fossil fuel generation rose by 17% (+33 TWh), compensating for the atypically low renewable output and a moderate rise in electricity demand. This was largely driven by less CO2-intensive gas generation which increased 23% (+21 TWh), alongside a 15% rise (+11 TWh) in coal-fired generation. Nuclear output also experienced an increase of 4% (+6 TWh).
Electricity prices exhibited volatility, with the European Power Benchmark averaging 100 €/MWh due to higher gas prices and more gas power generation. This marks a 49% increase from Q1 2024, but a 38% decrease from Q1 2023. Retail electricity prices for households in EU capital cities saw a marginal increase of 3% to 255 €/MWh, driven by higher energy taxes and network charges.
More than 620 000 new electric vehicles (EVs) were sold in Q1 2025 in the passenger car segment in the EU – a record high for the first quarter and 15% higher than the same quarter last year. This translates into a 21% EV share in the EU passenger car market.