Higher European gas prices increased the cost of dispatchable electricity generation across Southeast Europe in the week to September 13, adding pressure to power markets as wind, solar and hydropower output weakened.
Dutch TTF gas futures averaged €77.99/MWh, up 8.5% week on week. The contract reached a weekly high of €82.05/MWh before easing to €79.52/MWh, keeping gas-fired generation costs elevated across the region.
At a gas price of around €78/MWh, the fuel component of electricity generated by a modern combined-cycle gas turbine operating at approximately 55% efficiency reaches roughly €142/MWh. Carbon costs, operating expenses and plant margins add further costs, helping explain why wholesale electricity prices remained between €155/MWh and €177/MWh across much of Southeast Europe despite a 4.7% decline in regional demand.
Greece reduced gas-fired generation by 13.2%, contributing to an 11.6% decline in total thermal output. Lower domestic electricity demand and stronger exports helped the Greek wholesale price fall 3.2% to €155.32/MWh, although the market remained exposed to elevated gas costs during periods of weaker renewable generation.
Hungary increased thermal generation by 33.3%, while Romania raised output from thermal plants by 10.6% and Bulgaria by 17.6%. The additional conventional generation supported system adequacy but also increased the exposure of electricity prices to gas and carbon costs.
Gas-fired power remains a crucial source of flexibility because plants can respond relatively quickly when wind and solar generation changes. That flexibility becomes more expensive when European gas markets are tight, particularly during evening hours when solar output declines while electricity demand can remain relatively high.
Higher LNG inflows through Greece and Croatia improved physical gas availability during the week, but they did not remove the region’s exposure to European hub prices. Imported LNG and pipeline gas remain closely linked to pricing conditions across the wider European market.
Southeast European power markets therefore face a double sensitivity: lower renewable generation increases the amount of gas-fired electricity required, while higher TTF prices raise the cost of each additional megawatt-hour produced from gas.
Elevated by Virtu.Energy
