In January, nuclear power emerged as a critical stabilizing force within the energy markets of South-East Europe, providing a robust price anchor amidst fluctuating conditions. While hydropower determined the timing of price movements, nuclear generation set limits on how far prices could rise, contributing to market stability during a period characterized by heightened demand and supply constraints.
The nuclear landscape in the region is notably concentrated yet impactful, primarily featuring Bulgaria’s Kozloduy Nuclear Power Plant alongside Romania’s nuclear facilities. Together, these entities deliver approximately 4 GW of dependable baseload capacity. Throughout January, they operated at near full capacity, which allowed neighboring countries to benefit from low marginal costs and engage in effective energy arbitrage.
Bulgaria’s substantial nuclear output was instrumental in maintaining its status as a net exporter for much of January. The country facilitated significant energy exports to Romania, with over 400 GWh transferred during the month. This export capability played a pivotal role in shaping pricing dynamics on the OPCOM market. Without the support of nuclear exports, Romanian peak prices could have surged even higher, particularly during evening hours when domestic supply became constrained.
The influence of nuclear energy stands in contrast to that of hydropower. While hydro resources react dynamically to market signals, nuclear power provides a steady baseline that mitigates volatility. In Bulgaria, the consistent output from nuclear generation ensured that a significant portion of regional demand was met at costs substantially lower than those dictated by gas prices or scarcity conditions, even as TTF gas prices hovered between €28 and €34/MWh. Consequently, gas-fired power plants were not often the marginal price setters during off-peak and transitional hours.
Romania’s reliance on its nuclear capacity further exemplifies this effect. Despite having access to domestic gas production and hydroelectric resources, Romania required its nuclear output to uphold system adequacy throughout January. Interestingly, the OPCOM market still experienced some of the highest average prices in the region despite this stability. This paradox illustrates that while nuclear power can stabilize volumes and dampen volatility, it does not eliminate price premiums arising from congestion or flexibility shortages within the grid.
In neighboring Croatia and Slovenia, the Krško Nuclear Power Plant serves an analogous stabilizing function through shared ownership and imports. Although Croatia does not possess any other domestic nuclear generation facilities beyond its stake in Krško, the plant’s consistent output helps decrease reliance on gas-fired generation and curtails average prices during non-peak periods. This dynamic explains why Croatia’s baseload averages remained elevated without further escalation despite frequent peak demand challenges.
Nuclear power also significantly contributes to market confidence due to its reliability against short-term weather fluctuations—a factor not shared by gas or hydro resources. In January, this reliability effectively lowered risk premiums embedded in both forward and spot pricing structures. Market participants could rely on a substantial portion of regional demand being satisfied regardless of adverse weather events or import limitations, thus preventing prolonged periods of scarcity pricing even when certain hours experienced extreme clearing prices.
From both trading and system-planning perspectives, the contribution of nuclear power during January was structural rather than opportunistic; it minimized system-wide emergencies while enabling consistent cross-border trade and preventing gas from becoming the primary price driver. The notable spike in SEE power prices without a corresponding increase in gas prices underscores nuclear’s role as a stabilizing anchor: it was not fuel scarcity but rather flexibility constraints that triggered these price movements.
For countries lacking access to nuclear energy—such as Montenegro and to some extent Serbia and Croatia—the month underscored their vulnerability to market volatility. These nations have been increasingly exposed due to their dependence on imports from regions with robust nuclear capabilities rather than possessing their own stabilizing assets. As electrification continues to raise demand for stable baseload generation, this disparity is expected to widen.
The developments observed in January reinforce that nuclear energy is not simply an aging asset within South-East Europe; it is fundamentally vital for ensuring market stability. While hydropower shapes pricing trends and gas influences marginal costs at peak times, it is ultimately nuclear that establishes a foundational floor for market operations. As long as nuclear availability remains high across the region, sharp price spikes may occur but prolonged crises can be avoided—a scenario that would likely change drastically if this essential anchor were removed.
