Southeast European power markets are developing a distinct regional risk premium, after Week 27 saw electricity prices rise across most SEE markets while northwest Europe moved lower on cooler weather and stronger wind generation.
The regional divergence was the defining trend of the week. SEE power markets tightened, while northwest Europe softened, highlighting the growing importance of regional fundamentals. For market participants, this suggests that SEE should no longer be viewed simply as an extension of broader European power-market trends. Its price dynamics are increasingly shaped by its own demand, hydropower, renewable generation, thermal output and cross-border flows.
Romania recorded the highest average price in the monitored SEE markets at EUR 164.31/MWh, followed by Hungary at EUR 162.04/MWh. Croatia averaged EUR 142.57/MWh, Serbia EUR 139.93/MWh, Italy EUR 134.85/MWh, Bulgaria EUR 114.61/MWh and Greece EUR 112.81/MWh. Türkiye remained the lowest-priced monitored market at EUR 47.36/MWh, despite recording a sharp percentage increase from a low base.
Northwest Europe followed the opposite trajectory. France recorded the steepest weekly decline, with prices falling 32.1% to EUR 78.60/MWh, while Spain and Portugal dropped by approximately 27.7% to around EUR 63.20/MWh. Germany, Belgium, Switzerland, Slovakia, Poland, the Netherlands, Austria and the Czech Republic also recorded significant weekly declines.
The divergence was driven by fundamentally different market conditions. Northwest Europe benefited from cooler weather following the late-June heat wave and stronger wind generation. SEE, by contrast, faced rising demand alongside weaker renewable and hydropower output, tightening the regional supply-demand balance.
SEE electricity demand increased 2.1% to 18.80 TWh during the week. At the same time, variable renewable generation declined 3.3%, with wind output falling 5.1% and solar generation decreasing 1.8%. Hydropower output also declined 3.4%, forcing the system to rely more heavily on thermal generation, which rose 6.5%.
The increase in cross-border flows reinforced the tightening trend. SEE net imports rose 28.2% to 1.25 TWh, with Hungary, Romania and Serbia all increasing their import requirements. Greece, Bulgaria and Türkiye remained net exporters, although their export balances narrowed during the week.
The market structure has important strategic implications. Romania and Hungary are emerging as the region’s premium-price anchors, while Serbia represents a key stress market due to its sharp price increase and growing import dependence. Croatia remains part of the high-price corridor, while Greece and Bulgaria continue to provide lower-priced regional references, although both remained above EUR 100/MWh.
Gas prices provide an important macroeconomic overlay. TTF futures averaged EUR 43.59/MWh, up 5.5% week on week, and moved above EUR 45/MWh by the end of the week. As SEE becomes more dependent on thermal generation, firmer gas prices can provide additional support for peak power prices and contribute to a wider regional risk premium.
The current trend could continue if hot weather persists, wind generation remains weak, hydropower output stays subdued, gas prices remain firm and import requirements increase in Hungary, Romania and Serbia. Conversely, the signal could weaken if cooler weather reaches SEE, wind generation recovers, hydropower improves, gas prices decline or thermal availability in Serbia normalizes.
Trend view: SEE is increasingly trading as a distinct power-market risk zone rather than simply following broader European market movements. Demand, wind, hydropower, thermal generation, gas prices and cross-border imports should remain the key indicators for assessing whether the regional risk premium will widen or begin to fade.
