Wartime Gas Prices Drag on Europe's Green Investment Climate
Montel reports high wartime energy prices are a "bad development" for green investing as European gas holds near multi-year highs with storage below seasonal norms.
Montel reported on Wednesday (2026-09-16) that high wartime energy prices are a "bad development" for green investing in Europe, a framing that cuts against the assumption that expensive fossil fuels automatically accelerate the energy transition.6
The economics behind that assessment start with gas. ICE Endex TTF front-month closed at €79.54/MWh at Friday's close (2026-09-19), with the Dutch THE month-ahead contract at €80.70/MWh. European gas storage stood at around 64% of capacity, below the five-year seasonal average, as the injection season draws toward its close, Gas Infrastructure Europe data showed.5
The proximate driver is geopolitical. European and British wholesale gas prices rose on Wednesday (2026-09-02) as markets priced in the risk of disruption to LNG shipments through the Strait of Hormuz, which carries approximately 20% of global LNG traffic, with Qatar among the major suppliers using that route. ICE Endex TTF front-month reached €79/MWh that day, its highest since early 2023. Prices have not retreated since.5,4
The path from expensive gas to constrained green investment runs through project economics rather than sentiment. High power prices improve the revenue line for renewable developers on paper. But they also raise the cost of steel, cable, turbine components and construction — the inputs that dominate a wind or solar project's capital budget. Household budgets squeezed by energy bills become politically harder to redirect toward green levies or transition spending. Governments prioritise immediate supply security.6
German benchmark power last traded at €173.18/MWh, reflecting gas setting the marginal price across large portions of the generation day. UK Carbon, traded as UKA, last closed at £58.85/tCO2. The EU Emissions Trading System, which covers around 40% of the bloc's greenhouse gas emissions, was designed to price carbon high enough to force switching away from gas in power generation. UKA at those levels has not yet delivered that outcome.1
Europe's green transition was already under strain before the latest gas move. A July report from Oilprice noted that Europe had missed critical transition milestones, with London Climate Action Week taking place during an intense heat wave in the week of 2026-06-22, forcing cancellations. The same report projected that by 2030, Europe's largest economies could lose more than $600bn to heat-related expenses and shortfalls, with France projected to lose $240bn, Italy $147bn, Germany $131bn and Spain $120bn.3
Those projections represent a demand-side argument for faster decarbonisation. The supply-side response has been uneven. Mubadala's $200m purchase of a stake in Equitix's Greenlink joint venture — operator of a 504MW subsea interconnector between Ireland and Great Britain — alongside a separate $325m investment in the 2.9GW Hornsea 3 offshore wind farm show institutional capital still moving into European energy infrastructure. Both transactions were announced prior to September 2026. They are individual deals, not evidence of a trend.2
What the Montel report describes is a specific squeeze: wartime energy prices make fossil fuels expensive enough to hurt consumers and raise construction costs for renewables, but not expensive enough to make new renewable investment obviously more attractive in the short run than buying existing gas-fired capacity. Green capital sits in that gap.6
Storage is where the near-term pressure concentrates. European inventories at roughly 64% of capacity entering the final weeks of the injection period leave a thinner cushion than the five-year average ahead of the heating season. If Hormuz risk persists through October, ICE Endex TTF front-month has room to move higher, and each additional euro on the gas price adds further cost pressure to the green supply chain.5
The Montel piece does not specify which investment categories face the sharpest slowdown, nor does it quantify the capital at risk. What the storage number makes concrete is that Europe could face a winter in which high gas prices are not a brief spike but a sustained condition — one that pushes 2027 green investment decisions toward delay rather than acceleration.6,5