Hydropower remains one of the most underappreciated and underpriced risk factors in SEE power market analysis. Week 25 provided a clear example of its importance. Regional hydropower generation declined by 4.7%, falling to 3.57 TWh, and this reduction contributed to higher thermal generation requirements and firmer electricity prices across much of the region. While solar generation increased, hydro weakness continued to influence market dynamics because hydropower delivers something solar cannot: dispatchable energy, system balancing and operational flexibility.
A dedicated Hydro Sensitivity Tracker would provide valuable insight into regional market risks by focusing on Serbia, Romania, Croatia and Greece, while using Italy as the premium pricing benchmark. In these markets, hydropower is not only a source of electricity generation but also a critical provider of ramping capability, balancing services and evening supply support. When hydro availability declines, power systems become increasingly dependent on coal generation, gas-fired plants, imports and higher-cost balancing resources, creating upward pressure on prices.
Serbia illustrates the positive side of the hydro equation. During Week 25, domestic hydropower generation increased by 42.9%, helping the country shift from a net importer to a modest net exporter of electricity. However, despite this strong recovery, SEEPEX prices still increased by 9.6%, highlighting an important market reality: strong domestic hydro conditions can reduce physical system stress, but they cannot fully shield Serbia from broader regional price movements and cross-border market pressures.
Romania presents the opposite scenario and demonstrates why hydro sensitivity deserves close attention. Hydropower generation declined by 9.8%, weakening one of the country’s most important sources of flexibility. Romania recorded an average electricity price of €104.84/MWh during Week 25 and subsequently emerged as the most expensive SEE market on the forward day-ahead map for 24 June, reaching €202.95/MWh. This sharp price response highlights how reductions in hydro availability can rapidly translate into higher market volatility, tighter supply conditions and stronger scarcity pricing.
Greece and Croatia require a more nuanced assessment. Greece benefits from a diversified generation mix and can partially offset weaker hydro conditions through solar output, wind generation and flexible gas-fired capacity. Croatia, by contrast, is more exposed to regional market dynamics due to its greater reliance on imports and Adriatic corridor price flows. For this reason, any Hydro Sensitivity Tracker should move beyond simple generation figures and incorporate factors such as reservoir levels, water inflows, pumping-storage capability, import dependence and seasonal demand patterns, all of which influence the ultimate price impact of hydro fluctuations.
Hydropower should no longer be viewed as a background generation source within SEE power markets. It has evolved into a market-shaping flexibility asset, capable of influencing price formation, system reliability and regional trade flows. As renewable penetration increases and evening flexibility becomes more valuable, understanding hydro conditions may prove just as important as tracking fuel prices or electricity demand when assessing future market risks.
