Elevated European gas prices are increasing the cost of dispatchable electricity across Southeast Europe, leaving power markets vulnerable when wind, solar or hydropower output declines.
Dutch TTF gas futures averaged €77.99/MWh in the week to September 13, an increase of 8.5%. The contract reached a weekly peak of €82.05/MWh before easing to €79.52/MWh.
At a gas price close to €78/MWh, the fuel component of generation from a modern combined-cycle plant operating at approximately 55% efficiency approaches €142/MWh. Carbon allowances, operating expenditure and plant margins raise the final cost further.
That calculation helps explain why wholesale electricity prices across much of Southeast Europe remained between €155/MWh and €177/MWh, despite a 4.7% decline in regional demand.
Greece reduced gas-fired generation 13.2%, contributing to an 11.6% fall in total thermal output. Lower domestic demand and stronger exports helped the Greek electricity price decline 3.2% to €155.32/MWh, but the market remained exposed to expensive gas during low-renewable hours.
Hungary increased thermal generation 33.3%, while Romania raised it 10.6% and Bulgaria 17.6%. These increases strengthened system adequacy but also linked electricity prices more directly to the cost of gas and carbon.
Gas-fired power remains important because it can respond rapidly to changes in wind and solar output. Its flexibility carries a substantial price when European gas markets are tight. The problem is particularly acute during evening hours, when solar production falls but electricity demand remains elevated.
Higher LNG inflows through Greece and Croatia improved physical gas availability during the week. They did not eliminate exposure to European hub pricing, because imported LNG and pipeline gas continue to be valued against the wider continental market.
Southeast Europe therefore faces a dual sensitivity: declining renewable production raises the volume of gas-fired generation needed, while rising TTF prices increase the cost of every additional megawatt-hour produced.
Elevated by Virtu.Energy
