Thermal generation is re-emerging as a key market component in SEE power systems, but in a fundamentally different role than in the past. It is no longer primarily a baseload pillar; instead, it is increasingly functioning as a flexibility margin resource. Week 25 made this structural shift clear, with regional thermal output rising by 19.4% to 5.31 TWh, while gas-fired generation surged even more strongly by 32.3%.
Importantly, this increase occurred despite falling gas prices. This indicates that thermal plants were not being dispatched purely on fuel cost competitiveness, but rather activated to meet a growing need for controllable and dispatchable capacity. The system relied on thermal generation to balance rising demand, weaker wind output, and reduced hydropower availability. As solar penetration increases, these imbalances are increasingly concentrated in the ramping and evening hours, when flexible generation becomes essential.
A thermal flexibility margin monitor would track the available dispatchable capacity from gas, coal, and lignite against residual load conditions. Its purpose would not be to emphasize thermal dependence, but to quantify how much flexible generation the system still requires before alternatives such as battery storage, demand response, and transmission expansion can effectively take over balancing functions. This would provide a clearer view of system stress and flexibility adequacy in real time.
Italy represents the central reference case for this dynamic. In Week 25, thermal generation increased by 66.7%, while gas-fired output rose by more than 61%, reflecting a sharp reliance on dispatchable capacity during periods of renewable variability and strong demand. Hungary and Croatia also increased gas-fired generation as regional balance tightened. In Greece, gas generation expanded significantly to offset the complete absence of lignite production, further reinforcing the role of thermal flexibility in maintaining system stability.
Serbia requires a distinct analytical perspective due to its continued reliance on both coal and hydropower. When coal output weakens, system balance can still be supported through hydrological recovery or imports, but exposure to regional pricing increases rapidly when neighbouring markets are simultaneously tight. This makes Serbia particularly sensitive to broader SEE thermal and flexibility conditions.
A thermal flexibility monitor would therefore serve multiple stakeholders. For industrial consumers, it would signal scarcity risk and potential price spikes. For traders, it would provide insight into periods of tight marginal capacity and upward price pressure. For policymakers, it would help evaluate whether the energy transition is delivering sufficient firm and flexible capacity to support growing renewable penetration without increasing system instability.
Thermal generation is increasingly becoming a scarcity-hour product rather than a baseload resource. Its true value is now revealed during periods of high ramping demand and limited renewable output, when system flexibility—not annual energy volume—determines price formation and market stability.
