Operating environment

Operating environment in Q3 2026

European power markets

In the third quarter of 2026, Nordic spot prices increased compared to the same period in the previous year. This was primarily attributable to markedly reduced hydro reservoir levels, lower nuclear availability and exceptionally high Continental power prices, which were driven by higher gas prices. Finnish spot prices were a notable outlier, declining year-on-year due to expanded transmission capacity from northern Sweden through the Aurora transmission line. Nordic power demand was marginally above the five-year average, as well as slightly ahead of levels in the third quarter of 2025. Low hydro inflows, caused by the previous winter's substantial snow deficit, deepened the Nordic reservoir deficit from a moderate gap (-5 TWh) at the beginning of the quarter to a considerable deficit (-13 TWh) by the end of it. During July, below-normal energy precipitation, together with weak inflows, caused the Nordic reservoir balance to decline sharply. Lower Nordic nuclear availability and escalating gas prices, influenced by the US-Iran tension escalations during August and September, resulted in a rapid increase in both Nordic spot and futures prices.

During the third quarter, the average Nordic system price in Nord Pool was 74.4 (36.0) EUR/MWh. The average area price in Finland was 37.7 (40.4) EUR/MWh. In Sweden, the average price in SE3 (Stockholm) was 62.0 (41.3) EUR/MWh, while SE2 (Sundsvall) averaged 33.7 (16.6) EUR/MWh. In Germany, the average spot price in the third quarter was 125.5 (82.8) EUR/MWh.

In January–September, the average system spot price in Nord Pool was 77.5 (36.0) EUR/MWh. The average area price in Finland was 59.7 (39.2) EUR/MWh. In Sweden, the average area price in the SE3 area (Stockholm) was 70.8 (43.0) EUR/MWh, and the price in the SE2 area (Sundsvall) was 45.8 (13.9) EUR/MWh. In Germany, the average spot price in January–September was 107.7 (88.0) EUR/MWh. At the beginning of the year, electricity prices in Finland and the SE3 area in Sweden exceeded German price levels but eased in March relative to Germany as Nordic weather conditions turned milder.

According to preliminary statistics, Nordic power consumption in the third quarter amounted to 85 (84) TWh. Both industrial and non-industrial power demand across the Nordics largely held steady, with Norwegian industrial demand increasing marginally and Finnish non-industrial demand showing some improvement. During January–September, power consumption in the Nordics increased to 297 (288) TWh. In Central Western Europe (Germany, France, Austria, Switzerland, Belgium and the Netherlands), power consumption in the third quarter totalled 304 (299) TWh. While demand was slightly above the five‑year average and July saw a surge in demand driven by a sustained heatwave, the post‑energy‑crisis recovery remained sluggish. Overall power consumption remained approximately 40 TWh below pre‑crisis levels. During January–September, power consumption in Central Western Europe was 970 (958) TWh.

At the start of the third quarter, Nordic hydro reservoir levels stood at approximately 79 TWh, around 5 TWh below the long‑term average and 10 TWh below the level a year earlier. During the quarter, hydro inflows were below normal. Hydro generation was slightly below the long-term average. By the end of the quarter, reservoir levels had increased to around 88 TWh, corresponding to a deficit of 13 TWh relative to the long‑term average and 12 TWh below the level one year ago.

In late October, the Nordic system forward price on Euronext for the remainder of 2026 was around 116 EUR/MWh and for 2027 around 74 EUR/MWh. Nordic hydro reservoirs stood at approximately 90 TWh, around 11 TWh below the long‑term average and 12 TWh below year‑ago levels. The German electricity forward price for the remainder of 2026 was around 195 EUR/MWh and for 2027 around 150 EUR/MWh.

European commodity markets

In the third quarter, natural gas prices increased sharply, in the wake of the breakdown of the June interim ceasefire agreement in the Middle East. With LNG flows and Strait of Hormuz shipping activity still running below pre-conflict levels, the European gas markets were left in a tight position ahead of the winter period. Low storage inventories and ongoing uncertainty surrounding the pace of supply normalisation supported a persistent geopolitical risk premium, keeping gas forward curves at elevated levels. Oil prices similarly remained highly sensitive to developments in the Middle East, though having stabilised at levels below the peaks recorded at the beginning of the conflict.

Gas consumption in Central Western Europe totalled 233 TWh during the third quarter. Over the same period, regional gas storage levels increased but remained low for the season. Gas storage volumes rose from 257 TWh at the start of the quarter to 405 TWh by quarter‑end. This was 97 TWh lower than in the same period last year and 136 TWh below the five‑year average (2021–2025).

The average TTF front‑month gas price in the third quarter was 63.7 EUR/MWh and 50.0 EUR/MWh during January–September. The 2027 gas forward price increased from 34.9 EUR/MWh at the start of the quarter to 56.8 EUR/MWh at quarter‑end, remaining 27.7 EUR/MWh above the level observed one year earlier.

EU Allowance (EUA) prices increased during the quarter from 80.2 EUR/tonne to 85.1 EUR/tonne, which was 9.4 EUR/tonne higher than one year earlier.

Coal prices increased over the quarter. The ICE Rotterdam 2027 forward contract rose from 110.7 USD/tonne at the start of the quarter to 136.1 USD/tonne by quarter‑end, 29.6 USD/tonne higher year‑on‑year.

In late October, the TTF gas forward price for the remainder of 2026 was approximately 93 EUR/MWh. The corresponding EUA forward price for 2026 traded around 86 EUR/tonne, while the ICE Rotterdam coal forward price for the remainder of 2026 stood at approximately 149 USD/tonne.

Regulatory environment

The Commission proposed an EU data centre sustainability label scheme

On 21 September, the European Commission proposed a sustainability rating scheme for data centres, supporting its ambition to triple EU capacity within five to seven years, while improving transparency on energy and water use. The delegated regulation is still subject to a two-month scrutiny period by the European Parliament and Council before entering into force. From August 2027, public ratings will apply to operating facilities with installed IT power demand above 500 kW. The criteria include energy and water efficiency, electricity sourcing, grid flexibility, waste heat reuse and contributions to new clean generation.

The scheme recognises nuclear and renewables, including hydropower, in parallel and should support demand for clean power purchase agreements and guarantees of origin. It also highlights data centres’ role in system flexibility and district heating.

For Fortum, this creates opportunities in low-carbon electricity supply, PPAs, guarantees of origin, flexibility services and waste heat solutions, while strengthening the Nordics’ appeal for data centre investment.

Swedish parliamentary election result and impact on energy policy

Following the Swedish parliamentary election in September 2026, the political landscape remains fragmented as the centre-left bloc secured only a slim majority of 176 to 173 seats in the parliament. Discussions to form a new government are ongoing. Official election results indicate that broad political support may be required for major legislative initiatives.

For the energy sector, the outcome is expected to increase the importance of cross-party cooperation on issues such as electrification, energy security, industrial competitiveness, and low-carbon power generation. Policy development may rely more heavily on inquiries, committees, and negotiated solutions, potentially extending decision-making timelines. The election outcome is not expected to have any immediate impact on Fortum. However, continued monitoring of developments related to nuclear energy, renewable energy, grid expansion, flexibility, and electrification remains important, as the new political agenda takes shape.

Legislation on prioritisation of grid connection under development in Finland

The Finnish Government has proposed a new grid connection prioritisation framework as part of an amendment to the Electricity Market Act. The proposal is a response to the intensified public debate around data centres, electricity prices and the allocation of scarce grid capacity.

Fortum has submitted a statement on the draft by the Ministry of Economic Affairs and Employment and actively engages in the legislative process. The legislation is planned to take effect on 1 January 2027.

Fortum considers that the proposed framework risks undermining investments, electrification and Finland’s competitiveness, while offering limited benefits to the electricity system. Grid connection prioritisation should remain a last-resort, technology-neutral and non-discriminatory measure focused on efficient network use and advancing mature projects, with broader electricity market challenges addressed through separate market-based solutions and a thorough impact assessment conducted before adoption.