January 2026 marked a significant period for power markets in Southeast Europe, highlighting the intricate relationship between gas prices and electricity costs. The volatility of the Title Transfer Facility (TTF) gas prices had a profound impact on electricity systems heavily reliant on gas, leading to notable price adjustments across several countries in the region.
In particular, Italy, Hungary, Romania, and Bulgaria witnessed substantial increases in electricity prices influenced by expectations surrounding gas rather than immediate supply-demand dynamics. The average power prices recorded were €132.67/MWh in Italy, €150.41/MWh in Hungary, €150.51/MWh in Romania, and €148.55/MWh in Bulgaria. These figures underscore the prevailing trend of gas-linked marginal pricing that has become characteristic of these markets.
Conversely, Greece and Serbia experienced a temporary decoupling from this trend due to favorable hydro conditions that provided surplus electricity. However, analysts caution that this divergence is unlikely to be permanent; as hydro conditions stabilize, the influence of gas volatility is expected to re-emerge and dominate market dynamics.
The developments observed in January reaffirm a critical insight: gas continues to serve as the primary marginal driver of electricity prices throughout much of Europe and specifically within Southeast Europe. This reality necessitates a robust approach to cross-commodity risk management for stakeholders engaged in these markets.
