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Coal and lignite return to the margin as hydro generation falls across SEE

Coal and lignite played a larger role in SEE power generation during Week 24, even though day-ahead electricity prices fell across most markets. The apparent contradiction is explained by the simultaneous rise in renewable output and fall in hydropower generation.

Regional hydro production declined by 300.2 GWh, or 7.5%, to 3.70 TWh. Türkiye alone accounted for 229 GWh of that fall, while Bulgaria dropped 42.9 GWh, Greece 17.3%, Serbia 4.2%, Romania 2.4% and Italy 2.2%. Hydro weakness removed a flexible source of low-marginal-cost generation at the same time that summer demand was rising.

Thermal generation filled the gap. Total thermal output increased by 362.6 GWh, or 8.7%, to 4.52 TWh. The rise came entirely from coal and lignite, which surged by 420.6 GWh, or 24.4%, to 2.14 TWh. Gas generation declined by 58.0 GWh, or 2.4%, to 2.38 TWh.

Türkiye delivered the largest coal increase, adding 260.6 GWh, followed by Italy with 81.2 GWh and Serbia with 66.0 GWh. Bulgaria and Romania also recorded gains. The regional dispatch curve therefore became more coal-heavy, even as stronger wind and solar helped soften clearing prices.

This matters for industrial power buyers, especially those exposed to carbon accounting and supply-chain emissions reporting. A lower spot price does not necessarily mean cleaner electricity. In Week 24, cheaper power in several markets coincided with higher coal and lignite generation because hydro output weakened.

The week’s generation mix points to a more complicated summer ahead. Renewables will increasingly cap daytime prices, but hydro variability will determine how much thermal generation remains needed during peak and evening hours. Coal and lignite have not disappeared from SEE price formation; they are still close to the balancing margin when hydro underperforms.

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