TTF one-year forward price was 16 €/MWh on Jan. 7, 2020TTF one-year forward price hit 281 €/MWh on Aug. 25, 2022Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.The Goldman Sachs Group, Inc.EQUITY RESEARCH | September 04, 2022 | 11:00 PM EDTAjay Patel +44 20 7552-1168 ajay.patel@gs.com Goldman Sachs InternationalMathieu Pidoux +44 20 7051-4752 mathieu.pidoux@gs.com Goldman Sachs InternationalFollowing the spike in gas and power prices since mid-June, we believe that the Energy Crisis, and in particular affordability, has reached a tipping point, likely requiring significant policy intervention. In our view, the market continues to underestimate the depth, the breadth and the structural repercussions of the crisis – we believe these will be even deeper than the 1970s oil crisis. At current forward prices, we estimate that energy bills will peak early next year at c.€500/month for a typical European family, implying a c.200% increase vs. 2021. For Europe as a whole, this implies a c.€2 tn surge in bills, or c.15% of GDP, we estimate. We believe the market is overly negative on regulatory risk and believe that near-term solutions could be a major clearing event. We see scope for the introduct...
