Thermal power generation across South-East Europe declined during calendar week 13, with gas-fired output experiencing the most significant reduction as renewable and hydro generation increased.
Total thermal generation fell by 7.24%, with gas-fired output dropping by 12.78%. This reflects the displacement of marginal gas units during periods of improved renewable availability and lower demand in certain markets.
Italy recorded the largest decline, with thermal output falling by 24.75%, driven by a reduction in gas-fired generation of over 26%. Hungary also saw a substantial decrease of 24.58%, while Serbia recorded a sharp contraction of 48.71%, primarily due to reduced lignite generation.
The decline in gas-fired output is particularly notable, given the role of gas as the marginal price-setting fuel in most SEE markets. When renewable and hydro generation increase, gas plants are pushed out of the merit order, leading to lower overall generation levels.
However, coal and lignite generation remained broadly stable, declining by only 0.66%. This suggests that these sources continue to provide a base level of supply, particularly in markets with significant domestic coal resources.
In some markets, thermal generation moved in the opposite direction. Bulgaria and Türkiye both recorded increases, with Türkiye showing strong growth in both coal and gas output, aligned with its surge in electricity demand.
The data underscores the transitional nature of SEE power systems. While renewable generation is increasingly displacing gas during certain periods, thermal generation—particularly coal—remains a critical component of the supply mix.
From a pricing perspective, the reduction in gas-fired output contributed to the modest price declines observed during the week. However, as gas remains the marginal fuel during peak periods, its influence on price formation remains dominant.
