The South-East European power markets saw significant upward movement in March, characterized by rising clearing prices across various exchanges. This trend is attributed to a notable rebound in gas prices, which has tightened the marginal cost base for electricity generation. However, the trading volumes exhibited a more fragmented pattern, varying significantly from one market to another.
After a relatively subdued February, regional benchmarks have shifted higher, with average day-ahead prices settling within the €95–€120/MWh range across key hubs in the region. Italy emerged as the most expensive market, recording an average price of €143.36/MWh, thus solidifying its position as the price anchor for South-East Europe. Hungary and Croatia followed closely with average prices of €117.36/MWh and €110.12/MWh, respectively. Romania and Bulgaria cleared at €105.15/MWh and €103.51/MWh, while Greece and Serbia converged around €95/MWh. In contrast, Türkiye’s market saw a sharp decline, with prices dropping to €31.77/MWh, indicative of weaker demand and differing market fundamentals.
The increase in clearing prices is largely driven by escalating gas input costs, particularly as TTF futures surpassed €50/MWh. This has had a direct impact on thermal generation bids. Additionally, lower hydroelectric output across much of the region coupled with inconsistent renewable generation has further constrained supply and increased reliance on gas-fired power plants.
The dynamics of daily and hourly price formation indicated an increase in intraday volatility. Midday prices were generally suppressed due to solar generation; however, evening peaks widened considerably in tighter markets like Serbia, where balancing needs led to sharp price increases during ramping hours.
In terms of trading volume, liquidity remained heavily concentrated within specific markets. Italy dominated activity with approximately 24.2 TWh traded throughout March, significantly outpacing other markets. Greece followed with around 4.37 TWh, while Bulgaria and Hungary each recorded close to 2.8 TWh. Romania’s trading volume was about 1.35 TWh, with Croatia at 0.75 TWh, and Serbia lagging behind at just 0.46 TWh.
The month witnessed divergent trends in trading volumes across different countries. Greece reported a month-on-month increase of +7.4%, while Italy saw a modest rise of +2.6%, suggesting stable demand amidst ongoing cross-border trading activities. Bulgaria also experienced improved liquidity with a rise of +5.6%.
<pConversely, Hungary and Romania faced declines in traded volumes of -7.8% and -10.0%, respectively, reflecting either softer demand or fewer trading opportunities available during that period. Notably, Serbia’s volumes increased by +12.3%, although it still highlighted the limited depth of the SEEPEX exchange.
The daily volume patterns revealed a hub-and-spoke structure prevalent in regional trading dynamics: Italy consistently traded between 700–900 GWh/day, Greece averaged between 120–150 GWh/day, while Bulgaria and Hungary fluctuated between 80–120 GWh/day. In stark contrast, Serbia’s daily traded volumes remained below 20 GWh, underscoring its vulnerability to price volatility stemming from its limited liquidity.
The correlation between clearing prices and trading volumes was found to be non-linear; high-liquidity markets like Italy sustained elevated price levels due to their dependence on gas-fired generation sources, whereas smaller markets such as Serbia demonstrated heightened price volatility despite lower overall traded volumes.
The developments observed in March reaffirmed that the South-East European power markets remain intricately linked to fluctuations in gas pricing, alongside variations in hydroelectric output and renewable energy contributions which drive short-term divergences within these markets.
