Key Insights from the French Market Analysis
Analysis of the French energy market is key to understanding the dynamics and trends affecting the sector both locally and internationally. In this detailed analysis, we address the important factors influencing energy prices, supply and demand, and the latest regulatory policies. This comprehensive overview will allow you to keep up to date with weekly changes and anticipate possible market variations, both in France and in other relevant markets such as Spain.
Table of Contents
March 2026
Key figures of the month
Source: Haya Energy Solutions
In March 2026, electricity spot prices across the main European markets moved sharply higher compared with the previous month. A similar upward trend was also observed in Power Cal’27, with all countries posting month-on-month increases, although forward price levels remained within a relatively similar range to those seen in February.
Spain remained the lowest-priced power market in the region, averaging 40.27 €/MWh, despite a sharp increase from 15.08 €/MWh from the previous month. France ranked as the second-lowest market, with an average of 63.30 €/MWh, while the UK and Germany both moved close to the 93 €/MWh level. Overall, March once again showed a wide divergence in spot prices across Europe, largely reflecting each market’s generation structure and, in particular, its level of exposure to gas-fired technologies as the marginal price-setting source, as is reflected in Italy.
On the gas side, spot prices were broadly stable around the 50 €/MWh mark across most markets, with Germany standing slightly higher at around 55 €/MWh on average. Compared with February, gas prices increased across all countries, mainly driven by heightened geopolitical tensions in the Middle East and the disruption risk linked to the Strait of Hormuz, a key route for global oil and energy flows. Gas Cal’27 also recorded a relevant month-on-month increase across all markets.
As for CO₂, prices declined from around 75 €/t in February to 72 €/t in March, reaching their lowest closing levels since April 2025.
Overall, despite the strong upward pressure on energy prices caused by higher gas prices, stronger renewable generation and lower CO₂ prices helped to partially contain the rise in electricity market prices. This combination provided some downside offset in an otherwise bullish gas-driven environment.
Energy demand and generation mix
Source: Haya Energy Solutions
In March 2026, total generation in France reached 45,848 GWh.
Nuclear power remains the backbone of the French generation mix, playing a key role in ensuring system security of supply. Nuclear generation represented 68.5% of March’s energy mix, aligned with previous month nuclear generation. As in February 2026, CCGTs participation has been limited (2.7%) due to strong hydro, wind and solar PV generation.
In the matter of renewable energy sources, as you can see from the graph, hydro production comes second in the total energy mix, representing a 11.5% out of the total production and first in the renewable energy category. Hydroelectric stocks decreased from 1,430 GWh (at the end of February) to 953 GWh (at the end of March), aligned with 2025 levels in March (981 GWh). Finally, photovoltaic production has increased compared to the previous month, as winter comes to an end and sunnier conditions begin.
Energy prices & market panorama
March’s average spot electricity price in France reached 63.9 €/MWh, a 17% decrease compared to March-25’s levels (76.9 €/MWh). As the graph shows, prices fluctuated considerably throughout the month with the minimum spot price reaching -4.0 €/MWh on the 22nd of March, and the maximum spot price reaching 291.1€/MWh on the 4th March. On a month-on-month basis, prices increased compared to February, mainly driven by higher gas prices linked to supply disruptions caused by the Iran conflict as well as stronger export levels. Day-ahead prices frequently dropped to very low or near-zero levels around midday (16.6% of hours below 5 €/MWh), reflecting increased solar generation. In contrast, peak hours experienced sharp price spikes, with 5.2% of hourly prices exceeding 150 €/MWh, compared to only 0.2% in February.
In terms of cross-border flows, France remained a net exporter across most interconnections, with the exception of Spain. Hourly export levels exceeded 20 GW at peak during the month.”
Source: Haya Energy Solutions
Regarding PEG Day Ahead spot price, throughout March, spot prices increased 71% compared to February 2026, with prices ranging between 43.2 €/MWh and 61.0 €/MWh. During March 2026, European gas prices showed high volatility, initially remaining at elevated levels before entering a phase of stabilization towards the end of the month. Early in March, prices were supported by strong geopolitical tensions, particularly the Iran conflict and disruptions to LNG supply, which introduced a significant risk premium. As the month progressed, prices experienced some downward correction, driven by profit-taking from market participants and slightly weaker demand due to milder weather conditions. However, underlying market fundamentals remained tight, with continued concerns over LNG availability and global competition for supply.
Source: Haya Energy Solutions
Overall, despite easing from recent highs, gas prices remained sensitive to geopolitical developments, with no clear short-term trend established.
EU gas stocks are 28% full on average, compared to 35% last year. France’s gas storage levels are at 23%, below 2025 (30%).
Market trends and futures
Source: Haya Energy Solutions
During March, French power futures showed an overall upward trend, mainly driven by the sharp increase in gas prices, while carbon prices slightly declined. Short-term contracts (Q+1 and Q+2) increased significantly (+10% and +30% respectively), reflecting the stronger impact of gas prices on these horizons.
In contrast, front-month dynamic contracts (M+1 and M+2) decreased, supported by expectations of strong renewable generation and lower demand amid milder weather conditions. Finally, longer-term contracts (Cal-27 and Cal-28) also increased compared to the previous month, mainly due to disruptions in the gas supply chain and the resulting risk premium.
Gas markets were the main driver of the upward movement in power forwards, with prices rising sharply across all tenors (up to +70%), due to geopolitical tensions in the Middle East, particularly linked to the Iran conflict and risks around LNG supply routes such as the Strait of Hormuz. This introduced a significant risk premium despite relatively stable short-term fundamentals.
Despite the surge in gas prices, carbon markets behaved differently. EUA prices remained relatively muted and even declined at some points during the month, reflecting weak power demand due to mild weather and high renewable generation. Additionally, carbon prices were heavily influenced by policy uncertainty. Mid-month, discussions around potential EU ETS reforms (e.g. MSR adjustments or free allocation changes) triggered a sharp sell-off, with EUA prices briefly falling to ~€63/t before recovering as fears of aggressive intervention faded.
During March, oil prices surged and remained highly volatile, driven by the escalation of the Iran conflict and disruptions around the Strait of Hormuz. Brent prices approached ~$120/b by the end of the month, reflecting a strong geopolitical risk premium. Despite some corrections on profit-taking and de-escalation signals, prices stayed elevated throughout the month, with markets increasingly pricing in supply risks and broader macroeconomic impacts.
Regulation
In March 2026, the French regulator (CRE) published several key updates confirming a structural shift towards flexibility and system optimisation. Most notably, the CRE proposed to reform support schemes for large-scale PV installations (>100 kW) to incentivise hybrid PV + storage projects, aiming to address the increasing occurrence of negative price hours and the declining market value of solar generation. These proposals include adapting auction frameworks and remuneration mechanisms to better reward flexible generation, encourage the shifting of solar output, and reduce public support costs.
In parallel, the CRE updated gas storage tariffs for the 2026–2027 period, setting a significant increase (+23.8% YoY). Nevertheless, the impact on end consumers is expected to remain limited, as storage costs represent a relatively small share of final energy bills.
Overall, the regulatory direction in France clearly points towards improving system efficiency and integrating flexibility and storage as key pillars of the power system.
Key news and implications
In March 2026, the conflict involving Israel, the United States and Iran became a direct energy-market driver rather than just a geopolitical risk premium. The main transmission channel was the disruption to shipping through the Strait of Hormuz, which normally carries around 20 mb/d of oil and oil products and all LNG exports from Qatar and the UAE. As flows dropped sharply, Brent and Dutch TTF both rose by more than 60% during the month.
For Europe, the main vulnerability was gas. Tighter LNG availability, rising freight and insurance costs, and stronger competition with Asia pushed delivered gas prices higher just as EU storage levels stood at around 28% by late March, a weak starting point for the refill season. This translated into higher marginal costs for gas-fired generation and stronger upward pressure on power prices, including in Spain, especially during low-renewable and non-solar hours.
Although stronger renewable output and lower seasonal demand helped to cushion part of the impact, the conflict clearly reinforced the sensitivity of European energy markets to gas supply risk, particularly in the short term.
