In January 2026, hydroelectric power generation emerged as a critical factor in stabilizing electricity prices in Greece and Serbia, amid a backdrop of increasing demand and regional price volatility. The analysis indicates that both countries managed to maintain significantly lower average electricity prices compared to their gas-reliant counterparts, marking them as exceptions in the broader Southeast European market.
Greece reported an average price of €108.67/MWh, well below the levels seen in Romania and Hungary. This favorable pricing is attributed to a remarkable 155.37% surge in hydro generation, which effectively displaced gas-fired plants during peak demand periods. This shift allowed Greece to minimize its exposure to TTF-linked pricing, particularly during high-demand evening hours.
Similarly, Serbia’s electricity market displayed resilience, with hydro production increasing by 186.06%. As a result, Serbia’s average price was stabilized at €118.13/MWh, despite experiencing a 33.43% rise in demand and relying on imports for 23.45% of its consumption needs. The availability of hydroelectric resources enabled Serbia to postpone its reliance on imports during critical peak times, thereby mitigating potential price escalations.
However, experts caution that this insulation provided by hydro generation is not robust or permanent. The seasonal and often unpredictable nature of river flows means that conditions can shift dramatically within short timeframes. A decline in hydroelectric output could quickly force both Greece and Serbia back into dependency on gas and imports, exposing them once again to the fluctuations of regional pricing dynamics.
The developments observed in January underscore hydro’s role as a significant but temporary volatility dampener within these markets. While hydro generation can provide immediate relief from price surges, it does not offer a long-term solution for energy stability. Market participants must remain vigilant, as the reliance on hydro resources can lead to asymmetric risks in forward market positioning.
