Warm Sweater Day: an urgent call to separate electricity and gas prices in the face of persistently high gas prices

When wind and sun are not enough… Nuclear energy and gas as an alternative

At the time, the millionth solar PV installation had been placed. Milestones like that show how quickly renewable capacity can grow, but they do not change a hard reality: when wind or sun are insufficient, the system needs dispatchable generation or flexibility (e.g., nuclear, gas plants, storage, or demand response) to avoid blackouts.

Nuclear power, when available, supplies large volumes of low-carbon electricity with low variable costs and without depending on wind or sun. In the context of Belgium’s nuclear phase-out, the shutdowns of Doel 1 (permanently shut down on 14 February 2025) and Doel 2 (permanently shut down on 1 December 2025) are now a reality. Tihange 1 was, under the planning at the time, scheduled to stop in 2025. At the same time, Belgian nuclear policy has shifted in recent years: the lifetime extension of Doel 4 and Tihange 3 until 2035 is part of the LTO trajectory and also received a green light within the EU state-aid framework. In addition, in May 2025, the federal parliament voted to remove the phase-out logic and the ban on new nuclear capacity from legislation, reopening the debate on new nuclear projects.

Gas remains an important part of the electricity mix, but its share varies significantly depending on (1) nuclear availability, (2) weather-dependent renewables, (3) imports/exports, and (4) relative fuel prices. The central message remains: as long as gas plants often set the marginal price, gas price movements can weigh disproportionately on wholesale electricity prices.

That gas market is geopolitically sensitive and risks shift over time (geopolitics, infrastructure incidents, LNG dynamics, storage levels, Asian demand). It is therefore more prudent to reason in terms of an ongoing price-shock and supply-risk exposure than to fixate on a single scenario.

The gas and electricity prices

The link between gas and electricity prices lies in the fact that, on wholesale markets, the electricity price is set by the last production unit that must be switched on to avoid a blackout. This pushes up the electricity bill for everyone—including those generating at lower costs (nuclear, solar, wind, hydro)—and can lead to very large, albeit temporary, profit margins.

This is the core of marginal pricing in the day-ahead market. The EU’s electricity market design reform aims to reduce exposure to that short-term price formation via, among other things, more long-term contracts (e.g., CfDs and PPAs), strengthened retail protections, and flexibility mechanisms—without abolishing spot-market price formation altogether.

What was, in the winter of 2022–2023, a long temporary profit margin for some, was for many others a choice between turning the heating down to the edge of what is livable or cutting spending on food. Money was found to step in, through the “basic package” for electricity and gas. That package, introduced in 2022 by two laws, has since expired. The crisis logic of temporary support remains relevant, however: such measures are by nature exceptional, time-limited, and must be proportionate—also in light of EU rules on market functioning and state aid.

High prices can return and fluctuate sharply. If this contribution is republished, it is important to communicate gas prices with the correct unit and a clear source: wholesale markets typically use €/MWh, while consumers often see m³ on their bill. Without that explanation, confusion arises quickly.

Comparing inflation figures with January 2025 prices

Inflation figures compare prices with the same month in the previous year. The specific percentages referred to in the original text are, of course, time-bound. Anyone redistributing this contribution should use the most recent Statbel figures and explicitly state which index (CPI/health index) and which period is being used. This prevents readers from interpreting historical figures as the “current situation.”

For businesses, the challenge remains twofold: they are encouraged to produce with low or zero CO2—i.e., to electrify—but electricity price shocks feed directly into cost structures and indirectly, via inflation, into wage costs. This reduces their ability to compete in export markets where competitors are less exposed to the same dynamics, and they must defend the domestic market against imports that may be cheaper to produce elsewhere. That is precisely why, at EU level too, the question of reducing end users’ (households and industry) vulnerability to short-term shocks has become central.

Hence the renewed proposal to “decouple”—or at least dampen—the impact of gas on end bills for generation that does not depend on gas. Legally and economically, “decoupling” is often a catch-all term. In the EU today, the debate more often focuses on (1) risk-sharing through long-term contracts, (2) consumer protection, and (3) temporary emergency measures in cases of exceptional price crises. A complete structural decoupling of spot prices is not the direction of the current EU framework; rather, the spot market’s impact on end bills is reduced via contract structures and protective rules.

By limiting extraordinary margins (for example through caps on market revenues or temporary measures that skim windfall profits), policymakers can dampen the impact on bills and on inflation. It is important to be legally precise, however: fixed thresholds such as “20% above purchase price” or “50% above production cost” are not general EU norms, but possible policy options. What is solidly anchored is that, during the energy crisis, the EU allowed exceptional, temporary interventions—such as a temporary cap on the market revenues of inframarginal producers (e.g., renewables and nuclear) at 180 €/MWh via Regulation (EU) 2022/1854.

Within that same framework, EU energy law has long contained public service obligations and mechanisms to protect vulnerable customers (including, in specific circumstances, regulated tariffs and supply obligations). Since the 2024 reform, the emphasis on consumer protection has been strengthened further through adjustments to the electricity directive framework.