The ECB explains why this energy shock reached bills differently
Serguey Asael Shinder2 min readAn Economic Bulletin box by Friderike Kuik, Eliza Lis and Johannes Schäfer examines how the rise in energy prices in the first half of 2026 reached consumers — and argues the shock differs from 2021-22 in three ways.
It is smaller. The increases in wholesale gas and electricity prices are more limited than during the last energy crisis.
The gas-to-power link is weaker. Gas is normally the marginal price-setter for electricity, so wholesale gas moves wholesale power. The box says that transmission was dampened by a shift towards generation from renewables.
Retail pass-through has evolved. How wholesale prices reach retail gas and electricity bills is not what it was, and the box is largely an examination of that mechanism.
The measurement behind it is worth knowing: the total energy cost index aggregates crude oil in EUR per barrel, wholesale gas as Dutch TTF in EUR/MWh and wholesale electricity in EUR/MWh, indexed to August 2021 = 100 and January 2026 = 100, weighted by each carrier's contribution to EU final energy consumption using data to 2024 and held fixed after. Latest observations are August 2026.
What it means
A weaker gas-to-power link changes what an energy shock does to inflation. If the same move in gas produces a smaller move in electricity, the headline effect is smaller and the second-round effect through industry is smaller with it. That is a structural change, and it was bought with generation capacity rather than with policy.
Fixed 2024 weights are the caveat to carry. The index holds the contribution of oil, gas and electricity at the 2024 mix. If the mix has moved since — and electrification says it has — the index slightly misstates the composition of the shock it is measuring.
Retail pass-through is where households actually meet this. Wholesale prices are a market; bills are contracts, tariffs and regulation. The distance between the two is the subject of the box, and it is the reason a wholesale chart is a poor guide to what a household pays.