The power markets in Southeast Europe (SEE) have witnessed a significant increase in day-ahead electricity prices on May 18, driven primarily by a sharp decline in wind generation and a rebound in regional demand following the weekend. This surge reflects the ongoing volatility in energy supply and demand dynamics across the region.
On this date, Hungary’s HUPX reported a day-ahead baseload price of €143.22/MWh, marking an increase of over €55/MWh from the previous day. Romania’s OPCOM closed at €143.19/MWh, while Croatia’s CROPEX and Slovenia’s BSP recorded prices of €143.24/MWh and €143.18/MWh, respectively. In contrast, Serbia’s SEEPEX remained decoupled at €82.27/MWh, with Albania and Montenegro trading even lower at €61.67/MWh and €84.19/MWh.
The primary factor influencing these price changes was a dramatic drop in wind output across the SEE region, which decreased by approximately 1,029 MW day-on-day, settling around 1,651 MW. While solar generation increased by nearly 978 MW, it was insufficient to offset the loss from wind energy, leading to a shift towards thermal and imported marginal pricing during peak evening hours, particularly around hour 21 when prices exceeded €250/MWh.
This price surge coincided with a notable increase in regional consumption, which rose to approximately 27.9 GW, an increase of more than 1.7 GW day-on-day. The rise in demand was accompanied by higher temperatures across the region and a significant contraction in net regional imports, which fell to just -80 MW, down from over 1.5 GW. This reduction in cheaper European inflows tightened local pricing structures considerably.
Despite these fluctuations, hydroelectric generation remains robust, contributing around 6.3 GW, or approximately 25% of the overall generation mix. Danube river flow levels are significantly above historical averages at around 6,848 m³/s, providing strong hydropower performance particularly in Romania and throughout the Balkan region. This situation is reflected in the positive Q1 financial results reported by hydro-centric utilities such as Romania’s Hidroelectrica and Montenegro’s EPCG.
Romania continues to emerge as a key player in regional electricity production, with Q1 2026 output increasing by 8.8%. Hydropower generation surged by 38.3%, while wind output rose by 18%. Hidroelectrica reported net profits exceeding €263 million, benefiting from favorable market conditions.
The profitability trend is echoed in Montenegro’s EPCG, which achieved a net profit of €36.5 million, up from last year’s figure of €10.2 million. These outcomes are increasingly relevant for regional electricity trading frameworks as they enhance the commercial viability of low-carbon electricity exports linked to EU supply chains.
The futures market indicates expectations for sustained high power pricing through summer months despite ongoing renewable expansions; Hungarian Week 21 baseload forwards traded at about €118.5/MWh, with June 2026 contracts above €113/MWh. EUA carbon prices have stabilized around €75.6/tCO₂, continuing to influence coal and gas pricing structures across SEE.
The gas market remains another pivotal element influencing regional dynamics, with CEGH gas prices around €50.67/MWh . Discussions among Greece, Serbia, North Macedonia, and Bulgaria regarding the expansion of the Vertical Gas Corridor into the Western Balkans highlight SEE’s strategic positioning as an emerging gas transit hub.
A notable structural divergence persists between fully integrated EU exchanges and partially isolated SEE markets; for instance, Serbia’s SEEPEX prices remain approximately €60/MWh below HUPX on delivery days due to local balancing conditions and cross-border congestion impacting pricing dynamics.
The evolving landscape includes improved battery storage economics amid fluctuating conditions; Albania’s proposed project combining 160 MW solar capacity with 60 MW battery storage exemplifies this trend toward hybrid flexibility assets over standalone renewables.
Thermal generation continues to play a critical role within regional balancing frameworks; coal and gas accounted for about 28% of total generation on May 18 despite favorable hydro and solar conditions. The closure of Greece’s Agios Dimitrios lignite plant will likely heighten dependence on gas resources and flexible capacity across interconnected systems.
The current market environment suggests that SEE electricity markets are entering a phase characterized by increased volatility, influenced by factors such as hydrology shifts, evening peak demand surges, cross-border congestion issues, and low-carbon electricity demands linked to CBAM regulations.
