A sharp decline in wind generation has emerged as a major driver of recent electricity price strength across Southeast Europe, highlighting the increasingly different roles that wind and rapidly expanding solar capacity play in regional power markets.
Variable renewable generation across a group of Southeast European markets fell to 3.50 TWh during the week of August 17-23, compared with 3.93 TWh in Week 30 in late July, representing a decline of approximately 11%.
Almost all of that reduction came from weaker wind output. Regional wind generation fell 26.4% to 1.14 TWh from 1.55 TWh over the comparison period, while solar production declined by just 0.9%. In Greece, wind generation dropped by around 48%, even as solar output increased.
The distinction is becoming increasingly important because wind and solar affect electricity prices in fundamentally different ways. Solar generation is concentrated within a relatively narrow daytime window, and strong photovoltaic output can significantly depress prices during the middle of the day. However, its contribution falls rapidly in the evening and does little to meet demand after sunset.
Wind generation, by contrast, is not restricted to daylight hours. When wind production declines simultaneously across several interconnected markets, the resulting supply gap can extend across a much larger part of the day. That lost generation must increasingly be replaced by hydropower, thermal generation or electricity imports.
The impact was clearly visible during August 17-23, when wholesale electricity prices increased across most Southeast European markets despite weaker aggregate demand. Greece recorded the largest rise, with its weekly average increasing 41.2%, while prices also climbed 16.9% in Bulgaria and 7.2% in Hungary.
The trend challenges the assumption that continued solar expansion will automatically lead to lower average electricity prices. Additional photovoltaic capacity can continue pushing prices down during solar-rich midday hours while having a far smaller impact on the cost of electricity during the evening peak.
If weak wind conditions coincide with the decline in solar generation after sunset, the region can experience a market characterized by cheap electricity during the middle of the day and significantly more expensive power only a few hours later. This combination is increasing intraday price volatility and making conventional peak-versus-off-peak assumptions less relevant.
Serbia’s SEEPEX market has already provided a clear example of this changing price structure. There have been periods when conventional daytime peak prices fell below the baseload average because the most expensive hours occurred after solar generation declined. In July, SEEPEX baseload prices averaged €109.43/MWh, while the conventional peak product averaged only €86.38/MWh.
The changing relationship between renewable generation and hourly electricity prices also has important implications for investment. Solar developers are increasingly required to focus on capture prices rather than relying solely on annual average wholesale prices. As more solar capacity enters the market, projects producing electricity at the same time may increasingly compete with one another and push down the value of their own output.
Wind generation may retain a relative advantage where its production profile is less correlated with the expanding solar fleet, although wind farms remain exposed to periods when low wind conditions affect multiple markets simultaneously.
The same market dynamics strengthen the economics of battery storage and flexible hydropower. Both technologies can help shift electricity from periods of abundant renewable generation into hours when supply is tighter and the availability of both solar and wind is limited.
For Southeast Europe, the next phase of renewable integration is therefore becoming less about the total volume of renewable electricity produced and increasingly about when that electricity is available.
Solar is increasingly determining how cheap electricity can become in the middle of the day, while wind is increasingly influencing how often the region must rely on other sources of flexible generation to meet demand.
