In week 16 of 2026, power prices in South-East Europe (SEE) experienced an upward trend, yet the underlying market dynamics reveal a more intricate narrative. The region is increasingly influenced by factors such as renewable energy oversupply and declining demand, which have altered traditional market behaviors typically driven by fuel costs.
On the Hungarian HUPX market, baseload prices averaged €110.47/MWh, reflecting a week-on-week increase of €18.3/MWh. Similar trends were observed across Central Western Europe, with German baseload prices reaching €109.09/MWh, Austria at €107.98/MWh, and Italy North trading notably higher at €124.85/MWh. In SEE, Romania averaged €105.40/MWh, Bulgaria at €98.31/MWh, Greece at €93.82/MWh, while Serbia’s SEEPEX remained the lowest major market at €90.96/MWh.
The most significant development during this period was not merely the price increase but the compression of regional spreads. The differential between Hungary and Germany plummeted to just €1.38/MWh, a stark decline from €19.71/MWh the prior week, marking its lowest point since August 2025. This shift suggests a temporary re-coupling of SEE markets with Central Europe, primarily driven by an oversupply of renewable generation rather than enhanced interconnection capacity.
Price volatility also characterized the market landscape; despite rising weekly averages, HUPX recorded 8 hours of negative pricing, down from 22 hours previously, while peak hourly prices reached as high as €278/MWh. This indicates a system marked by significant intraday fluctuations rather than consistent baseload pricing.
A pivotal factor influencing these trends was a notable change in the regional supply-demand balance. Total electricity consumption in SEE dropped to 28,863 MW, the lowest since September, attributed to a temperature increase of +3.4°C and a rise in distributed solar generation from prosumers. Demand fell most sharply in Romania and Serbia, whereas Greece experienced a slight uptick.
The supply side saw a remarkable surge in renewable generation, with wind output climbing to 3,047 MW, reflecting an increase of 1,143 MW week-on-week, and surpassing seasonal norms by 23%. Solar generation also peaked at one of its highest levels this year, reaching 8,198 MW. Together, these renewables contributed approximately 1.75 GW of additional supply compared to the previous week.
Conversely, conventional generation remained relatively stagnant; coal-fired output was reported at 4,477 MW, showing only minimal growth week-on-week, while gas-fired generation slightly decreased to 3,144 MW. Hydro generation saw a more pronounced decline to 6,783 MW, operating about 14% below seasonal averages.
This contrast between rising renewable production and decreasing hydro availability signifies an ongoing transition within SEE power markets. Short-term price formation is progressively dictated by variable renewable energy sources instead of traditional dispatchable baseload units.
The impact of these changes was evident in regional trade flows as SEE transitioned from a net importing position of -1,172 MW to a net exporting position of +195 MW, indicating a swing of roughly 1,367 MW. Notable export increases were led by Bulgaria (+870 MW) and Romania (+232 MW). Meanwhile, Serbia continued as a net importer at -245 MW due to its reliance on thermal generation and limited renewable integration.
This improved regional balance lessened reliance on imports from the CORE region; cross-border flows from Austria and Slovakia into Hungary and Slovenia dropped to some of their lowest levels since March 2025 during solar hours when surplus generation occurred in SEE markets.
The flow towards Ukraine and Moldova remained structurally significant with sustained positive exports over 29 weeks; however, volumes reached their lowest since December. These flows provide stability during evening peak hours by acting as a price-sensitive balancing mechanism that mitigates extreme price spikes above €200/MWh.
The fuel markets have also influenced this evolving landscape; CEGH gas prices fell further to €44.9/MWh —a seven-week low—while carbon prices increased to €74.9/t —a nine-week high—improving clean spark spreads for gas-fired units outside Greece by approximately €24.6/MWh . However , this did not lead to increased generation given that renewables continued displacing thermal output from the merit order.
This divergence between improved margins for generation and actual dispatch underscores a critical structural shift within the market dynamics; gas-fired plants are increasingly functioning as flexible backup capacity rather than serving as baseload or mid-merit generators.
The emergence of pronounced “duck curve” profiles across SEE markets was reinforced during this week’s events; midday periods experienced oversupply leading to suppressed prices due to high solar output while evening hours relied heavily on imports and dispatchable generation resulting in sharper price spikes—an intraday volatility expected to escalate with further renewable capacity additions across the region.
The interplay among expanding renewables, declining demand levels ,and constrained transmission capabilities will be crucial determinants for future price formations within SEE .While short-term pricing will align with broader European trends ,regional spreads are likely to remain compressed during high renewable output periods , punctuated by occasional decoupling events influenced by local congestion or weather-related disruptions .
This evolving environment positions flexibility as an increasingly vital asset class within power markets .Storage systems ,fast-ramping gas units ,and cross-border trading capabilities will become essential for leveraging value from intraday price differentials .For countries like Serbia ,which still depend on imports during peak hours ,the transition towards greater renewable penetration necessitates substantial investments into both generation capacity and system balancing infrastructure .
This period thus signifies more than just another cycle in pricing ; it highlights ongoing structural transformations within SEE power markets where renewable energy is now emerging as the primary force influencing both pricing mechanisms and energy flows .
