TTF gas prices: how to read quotes and convert them into the value of biomethane

TTF (Title Transfer Facility) is a virtual gas trading point in the Netherlands and the most important European reference price for natural gas. The most frequently cited quote is that of the futures contract for delivery in the nearest month (front-month) on the ICE Endex exchange, expressed in EUR/MWh. At the end of August 2022 the price exceeded 300 EUR/MWh, many times more than in the years before the energy crisis, when typical quotes ranged from a few to about twenty-odd EUR/MWh. For biomethane TTF is the reference point: the selling price is usually TTF plus a premium for the green attribute.

What TTF is

A virtual trading point is a place where gas changes owner without a physical pipeline being indicated; in practice it covers the whole Dutch transmission network. High liquidity made TTF the benchmark for Europe, displacing the formerly important prices based on oil-indexed contracts. Futures prices reflect the market's expectations of supply (pipeline imports, LNG, production, storage) and demand (weather, industry, power generation).

How to read quotes

• Front-month: a contract for delivery in the next month; the most frequently cited.
• Day-ahead (spot): delivery on the next gas day.
• Seasonal and annual contracts (Cal): show expectations for a longer period.
• Forward curve: a listing of prices for successive delivery dates; its shape shows whether the market expects prices to rise or fall.

In Polish conditions gas is also traded on the Towarowa Giełda Energii (Polish Power Exchange), and prices refer to the Polish virtual point; their relation to TTF depends on transmission capacity and the current situation.

Conversions

1 MWh = 3.6 GJ. The energy of methane: about 10 kWh/m³ (calorific value) or about 11 kWh/m³ (gross calorific value) at normal conditions; grid gas usually has a gross calorific value of about 10.5–11 kWh/m³. The measurement basis (gross calorific value or calorific value) should follow from the contract; the difference is about 10%.

Example (purely computational, with no reference to real quotes): a price of 40 EUR/MWh and an exchange rate of PLN 4.70/EUR is PLN 188/MWh. At 10.8 kWh/m³ (gross calorific value) the price per m³ is 188 × 0.0108 ≈ PLN 2.03/m³. Conversely, a price of PLN 3.00/m³ corresponds to 3.00/0.0108 ≈ PLN 278/MWh, i.e. about 59 EUR/MWh at an exchange rate of 4.70.

Why biomethane is sold at a premium

Biomethane delivers two products: physical gas (valued like TTF) and an environmental attribute (confirmed by a guarantee of origin and emission reduction certification). The premium depends on demand for green gas (regulations, customer declarations), on the quality of the certificate (e.g. emission reduction) and on the market (transport or heating). The premium is not constant: in times of high gas prices it is sometimes relatively lower, because the difference relative to fossil gas shrinks; in times of low prices – higher.

Example: cost versus revenue

Let us assume a biomethane LCOE of PLN 450/MWh (an assumption, see the article on LCOE). At a gas price of PLN 188/MWh the premium needed to cover costs is PLN 262/MWh; with gas at PLN 300/MWh – PLN 150/MWh. The difference shows how sensitive the project is to gas prices and why long-term agreements often define the price as the sum of a reference price and a fixed premium.

What to watch out for

• A quote from one day is not a trend; long-term contracts concern future expectations.
• Differences between TTF and local prices (transmission charges, balancing).
• Currency: TTF in EUR, revenues in PLN – exchange rate risk.
• The definition of the calorific basis of settlement.
• Volatility in crises: prices can change by several dozen per cent within weeks.

Where to get data

Official quotes are published by exchanges (ICE Endex for TTF, the Towarowa Giełda Energii for the Polish market) and by price agencies. For historical analyses, data series are available in industry services and EU statistics. Always record the date of the quote and the exact contract (e.g. the front-month for a given month), because prices change quickly and without this information comparisons lose their meaning.

Summary

TTF is an indicator worth understanding, but not to be copied into models as a constant. For project analysis use price scenarios (low, base, high) and always check current quotes at the exchange source.