Week 25 showed why SEE electricity prices can rise even when gas prices fall. TTF moved lower, sending a bearish fuel signal, but several SEE power markets still increased. The reason is that the region is no longer priced only by fuel cost. It is increasingly priced by scarcity hours, hydro availability, wind output and the cost of balancing evening demand.
This is one of the most important changes in the SEE power market. Gas remains a marginal technology in many hours, especially in Italy, Greece, Hungary and Croatia. But gas is not the whole story. During weeks of weaker wind and lower hydro, the system needs flexible generation to cover the evening ramp after solar output falls. That is where scarcity appears. It is not visible in average fuel prices, but it is visible in day-ahead power prices.
Italy was the clearest example. Lower gas did not stop the Italian market from trading at a strong premium because demand rose, renewable and hydro availability weakened, and gas-fired output increased sharply. Hungary and Croatia also moved higher, while Romania rose despite lower demand because hydro weakness and regional coupling mattered more than domestic consumption.
This marks a structural shift in price formation. In the older model, fuel cost and baseload demand explained much of the market. In the new model, the shape of the day matters. Solar can reduce midday prices, but it can also create sharper evening ramps. Wind can reduce prices when available, but when it weakens across several markets at once, scarcity returns quickly. Hydro can stabilise the system, but when hydrology softens, balancing becomes more expensive.
For suppliers, this changes hedging. A flat baseload hedge may no longer be enough. Customers with high evening consumption or inflexible production schedules face a different risk profile from those able to shift load into lower-price daytime hours. Industrial buyers need to understand when they consume, not only how much they consume.
For renewable generators, the same logic applies. Solar output is growing, but its market value depends on capture prices. Wind has a different profile and can be more valuable if it produces during higher-price hours, but it also carries weather volatility. Hydro and storage become more valuable because they can respond to scarcity rather than simply add energy volume.
SEE is moving into a summer market where average prices tell only part of the story. The real commercial signal is in the hourly shape. Evening scarcity is becoming the point where fuel, weather, grid constraints and demand all meet.
