Southeast Europe’s energy transition is still closely tied to conventional generation whenever demand rises and wind output weakens. Week 23 highlighted this dependence clearly. Regional thermal generation increased by 24.5% week on week to 4.22 TWh, as coal, lignite, and gas-fired plants stepped in to rebalance a tighter system.
The main driver was Türkiye, where thermal output more than doubled, rising by 103.2% to 2.03 TWh. Within that increase, coal generation grew by 55.7%, while gas-fired production surged by 278.1%. This sharp expansion was a direct response to a 31.0% jump in electricity demand. Even with stronger solar and hydro contributions, conventional plants were required to stabilize the system.
Greece also increased thermal generation, with lignite output rising by 66.2%, while Serbia similarly recorded higher thermal production. Romania posted a more moderate increase of 5.2%, supported mainly by gas-fired generation. In contrast, Italy reduced thermal output by 16.7%, largely due to lower gas generation, although it still remained the region’s highest-priced market at €128.09/MWh.
The underlying signal from the market is straightforward. Renewable growth has not displaced thermal generation from the SEE pricing stack; it has reshaped when thermal capacity is required. Coal, lignite, and gas increasingly provide balancing power during evening ramps, weak wind periods, hydro shortfalls, and demand spikes. As a result, thermal assets are becoming less about steady baseload production and more about flexibility and marginal pricing power.
This shift carries important financial implications. Gas-fired generation remains exposed to fuel prices near €50/MWh, keeping marginal electricity costs elevated. Coal and lignite units still play a key role in system stability, but they face increasing pressure from carbon pricing, environmental regulation, and long-term decarbonisation policies. Thermal plants may benefit from scarcity periods, but their long-term profitability is increasingly uncertain.
The transition risk in Southeast Europe is therefore two-sided. Rapid retirement of thermal capacity risks supply shortages and price volatility, while prolonged reliance increases carbon exposure and investment inefficiency. The region continues to navigate this balance while integrating more renewables into the system.
Week 23 demonstrates that simplified transition narratives do not reflect system reality. Even with strong renewable growth, conventional generation remains essential when wind falls by 15.5% and demand rises by 8.2%. The key question is not whether thermal generation disappears, but how quickly storage, hydro flexibility, demand response, and interconnection expansion can reduce its operational necessity.
Until that shift accelerates, thermal generation remains the system’s backstop. It sets the marginal price in tight hours, ensures reliability, and exposes the region to both fuel and carbon risks. The success of Southeast Europe’s energy transition will ultimately depend on how effectively this dependency is reduced without compromising security of supply.
