Southeast Europe’s electricity system used substantially less gas-fired generation in Week 34 than in Week 30, yet the region remained heavily exposed to rapidly rising European gas prices. The apparent contradiction illustrates why declining gas consumption does not necessarily mean declining gas influence over wholesale electricity.
Gas-fired generation across the monitored Southeast European markets fell from 3,901.11 GWh to 2,718.16 GWh, a reduction of 30.32%. Total thermal generation declined 13.07%, from 7,294.50 GWh to 6,341.11 GWh. Coal and lignite generation, by contrast, increased 6.76%.
At the same time, European gas prices were moving rapidly in the opposite direction. TTF futures averaged €63.99/MWh between 17 and 21 August, rising 4.4% compared with Week 30. The contract moved from €61.76/MWh on Monday to €65.87/MWh on Friday, reaching its highest level since January 2023 in the report’s series.
That combination matters because wholesale power prices are frequently determined by the cost of the marginal unit required to balance the system rather than the average cost of all generation. A market can therefore use fewer gas plants overall while remaining exposed to the cost of the gas-fired units that are still required during constrained hours.
The pattern was particularly relevant during evening periods. Solar output declines rapidly after sunset, while air-conditioning and other summer consumption can remain elevated. If hydro, wind, imports or low-cost thermal generation cannot fully meet the residual load, expensive gas generation can remain critical even when its total weekly output is lower.
Week 34 therefore shows how gas can retain pricing influence without maintaining volume dominance. The regional market’s move away from gas was partly a response to high fuel costs, but those same costs increased the value of the remaining gas-fired capacity when it was needed.
The gas market itself was under additional pressure. The report highlighted disruption to LNG shipping through the Strait of Hormuz, constrained global LNG availability and concern over European winter supply. Storage was only 63.24% full on 23 August, leaving the market particularly sensitive to further supply interruptions.
The implication for Southeast European electricity is straightforward. Lower gas burn does not eliminate gas-price risk. In a market with increasingly volatile renewable output, the remaining flexible gas units can become more—not less—important for price formation during scarcity periods.
