Electricity.Trade has developed a forward curve scenario framework to assess how different gas-system outcomes translate into power pricing trajectories across South-East Europe. January 2026 provided empirical evidence for all three modeled states: Base Case, Cold Stress Case, and LNG Shock Case.
Base case: Managed tightness, elevated volatility
In the base scenario, winter conditions normalize, LNG inflows remain stable, and storage withdrawals slow. TTF stabilizes in the €30–35/MWh range, allowing summer contracts to price moderately below winter levels. Injection economics remain viable but cautious.
Under this scenario, electricity prices in SEE moderate but remain structurally elevated. Hungary and Romania settle below January peaks but remain above €120/MWh during stress hours. Italy maintains its premium, while Greece and Serbia revert toward regional averages as hydro normalizes.
Volatility persists but compresses. Electricity.Trade notes that spreads narrow, but convergence remains conditional.
Cold stress case: Gas reclaims full marginality
In a cold stress scenario, prolonged low temperatures accelerate storage withdrawals below 45%, forcing aggressive LNG procurement. TTF breaches €45/MWh, and forward curves steepen sharply.
Electricity prices respond immediately. Gas-heavy markets reprice aggressively, with Hungary and Romania testing or exceeding €160–170/MWh. Italy’s premium widens, anchoring Adriatic spreads. Hydro-insulated markets decouple briefly but ultimately rejoin as reserves are depleted.
Electricity.Trade emphasizes that in this scenario, price moves are fast and correlated. Liquidity dries up in peripheral markets, amplifying volatility.
LNG shock case: Perception-driven repricing
The LNG shock scenario assumes no immediate physical shortage but a disruption narrative—US export outages, freight constraints, or Asian bidding pressure. TTF spikes on sentiment, potentially above €50/MWh, even if flows remain adequate.
Power markets react disproportionately. Forward electricity curves steepen sharply as traders price tail risk. Hungary’s transfer role accelerates transmission into SEE, while thin markets experience delayed but severe repricing.
Electricity.Trade notes that this scenario produces the highest volatility per unit of physical stress. Prices overshoot, then correct once clarity returns.
Scenario implications for trading desks
Across all scenarios, a common pattern emerges: power markets move first on expectations, not on shortages. Gas forward curves lead electricity pricing, storage defines the risk horizon, and LNG shapes volatility.
Electricity.Trade concludes that forward curve scenario modeling is now essential for SEE trading. Desks that rely on spot fundamentals alone will consistently react too late.
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