The price easing observed during calendar week 13 proved short-lived, with SEE electricity markets staging a sharp rebound at the start of April, underlining the fragility of the current equilibrium.
Day-ahead prices surged across the region on 1 April, with Serbia reaching €158.47/MWh, Romania €156.26/MWh, and several other markets moving above €140/MWh. The rapid increase effectively erased the previous week’s declines and re-established the higher pricing corridor that has characterized much of 2026 to date.
The speed of the rebound highlights a key feature of the current market environment: limited tolerance for imbalance. Even modest changes in supply-demand conditions can trigger disproportionately large price movements.
Several factors contributed to the surge. Gas prices, which had softened during CW13, stabilized and showed signs of upward pressure, restoring higher marginal costs for thermal generation. At the same time, renewable output declined in certain markets, particularly wind, reducing the availability of low-cost generation.
Hydropower, while generally supportive during the week, also showed localized variability, further complicating the supply picture. In systems where hydro plays a balancing role, even small fluctuations in inflows or dispatch can influence price formation.
Cross-border flows also played a role. Increased import demand in markets such as Italy and Hungary tightened regional supply, pushing prices higher across interconnected zones. The persistence of congestion on key interconnectors limited the ability of lower-priced electricity to flow freely, reinforcing local price spikes.
The rebound underscores the structural tightness of SEE electricity systems. Unlike markets with higher renewable penetration and greater flexibility, SEE remains sensitive to changes in marginal generation costs, particularly those linked to gas.
Forward markets reflect this reality. Q2 contracts remain elevated, with limited backwardation despite the recent volatility. Traders are pricing in continued uncertainty, particularly around gas supply and geopolitical developments.
From a trading perspective, the rapid price reversal reinforces the importance of short-term positioning and risk management. Intraday volatility has increased, creating opportunities for flexible assets such as battery storage and fast-ramping generation.
At the same time, the risk of extreme price spikes remains elevated. Market participants continue to monitor developments in global gas markets, particularly LNG flows and geopolitical risks, as key drivers of forward price expectations.
The broader implication is that SEE markets are operating within a narrow margin of stability. While supply conditions may temporarily improve, the system lacks sufficient flexibility to absorb shocks without significant price movements.
This suggests that volatility is likely to remain a defining feature of the market in the coming months, with prices oscillating within a wide range rather than settling into a stable trend.
