The potential impact of a summer heatwave on SEE power markets is already visible in the demand trends recorded during Week 25. Regional electricity consumption increased by 3.1%, reaching 16.34 TWh, even before the peak summer season fully arrived. This suggests that electricity demand across Italy, Greece, Serbia, Hungary, Romania, Croatia, and Bulgaria could rise significantly during July and August if high temperatures affect the region simultaneously.
The relationship between temperature and power prices is unlikely to be linear. Moderate increases in demand can often be absorbed when hydropower resources, wind generation and cross-border imports are readily available. The real challenge emerges when cooling demand remains elevated during the evening hours, precisely when solar generation begins to decline. Under these conditions, the market becomes increasingly dependent on flexible generation, storage and imports, making the evening delivery block the most vulnerable period of the day.
Italy remains the region’s primary stress point. During Week 25, Italian power prices averaged €127.69/MWh, while net electricity imports reached 1.12 TWh. A heatwave combined with weaker hydropower output and subdued wind generation would likely strengthen Italy’s demand for imports, increasing pressure across interconnected markets in the Adriatic region and Central Europe. Croatia could also face heightened exposure, particularly after demand increased by 9.7% during Week 25 and net imports rose by 26.0%, indicating growing reliance on external supply.
Hungary and Romania face a different type of risk. Both markets already recorded average prices above €100/MWh, with Hungary at €109.16/MWh and Romania at €104.84/MWh. If a regional heatwave coincides with tighter supply conditions in Central Europe, both markets could experience rapid price escalation as competition for available generation and imports intensifies.
For Serbia, the outlook is more balanced but still sensitive to regional developments. Domestic hydropower recovery and coal generation availability can help mitigate internal supply pressures. However, SEEPEX prices remain closely linked to neighbouring markets. Strong regional demand combined with weak wind generation could push Serbian prices higher through increased export opportunities and tighter regional balances, even without a significant domestic supply disruption.
The key takeaway from a potential summer heatwave scenario is that higher temperatures do not automatically translate into higher prices. The most significant market stress occurs when rising cooling demand coincides with limited evening flexibility, weaker renewable generation and constrained imports. In today’s SEE power market, the critical issue is not simply how much electricity is needed, but whether enough flexible capacity is available when the system needs it most.
