Power prices across South-East Europe (SEE) moved higher in week 16 of 2026, but the underlying structure of the market tells a more complex story—one increasingly defined by renewable oversupply, falling demand, and narrowing cross-border spreads rather than traditional fuel-driven tightness.
Baseload prices on the Hungarian HUPX market averaged €110.47/MWh, rising by €18.3/MWh week-on-week, broadly in line with gains across Central Western Europe. German baseload climbed sharply to €109.09/MWh, while Austria reached €107.98/MWh, and Italy North traded significantly higher at €124.85/MWh. Within SEE, Romania averaged €105.40/MWh, Bulgaria €98.31/MWh, Greece €93.82/MWh, and Serbia’s SEEPEX remained the lowest major market at €90.96/MWh .
Yet the defining feature of the week was not the price increase itself, but the compression of regional spreads. The Hungary-Germany differential collapsed to just €1.38/MWh, down from €19.71/MWh the previous week and marking its lowest level since August 2025. This sharp narrowing reflects a temporary re-coupling of SEE markets with Central Europe, driven not by stronger interconnection capacity, but by a structural oversupply of renewable generation across the region .
At the same time, price volatility remained pronounced. Despite higher weekly averages, HUPX still recorded 8 hours of negative pricing, down from 22 hours in the previous week, while peak hourly prices reached €278/MWh. This divergence highlights a system increasingly characterised by intraday extremes rather than stable baseload trends .
The core driver behind these dynamics was a significant shift in the regional supply-demand balance. Total electricity consumption across SEE fell to 28,863 MW, the lowest level since September, supported by a +3.4°C increase in temperatures and a continued rise in distributed, prosumer-based solar generation. Demand declined most notably in Romania and Serbia, while Greece was the only major market to register a modest increase .
On the supply side, renewable generation surged. Wind output rose to 3,047 MW, an increase of 1,143 MW week-on-week, placing generation 23% above seasonal norms. Solar output also expanded, with peak generation reaching 8,198 MW, marking one of the highest levels recorded this year. Together, wind and solar added roughly 1.75 GW of incremental supply compared to the previous week, fundamentally reshaping the market balance .
In contrast, conventional generation remained subdued. Coal-fired output stood at 4,477 MW, only marginally higher week-on-week, while gas-fired generation declined slightly to 3,144 MW, both remaining near multi-month lows. Hydro generation fell more sharply, dropping to 6,783 MW, reflecting reduced inflows in the Danube basin and operating 14% below seasonal averages .
This divergence between rising renewable output and declining hydro availability underscores a broader transition underway in SEE power markets. Increasingly, short-term price formation is being driven by variable renewable energy rather than dispatchable baseload sources. Coal and gas units, while still essential for system stability, are no longer consistently setting marginal prices.
The impact of this shift was clearly visible in regional trade flows. SEE moved from a net importing position of -1,172 MW in the previous week to a net export position of +195 MW, representing a swing of approximately 1,367 MW. Export growth was led by Bulgaria (+870 MW) and Romania (+232 MW), while Serbia remained a net importer at -245 MW, reflecting its continued reliance on thermal generation and limited renewable penetration compared to its neighbours .
The improved regional balance also reduced dependence on imports from the CORE region. Cross-border flows from Austria and Slovakia into Hungary and Slovenia declined to one of their lowest levels since March 2025, particularly during solar hours when SEE markets experienced surplus generation. In several midday periods, flows effectively reversed, signalling the growing influence of solar-driven intraday dynamics on transmission patterns .
Meanwhile, flows towards Ukraine and Moldova remained structurally significant, extending a 29-week streak of positive exports, though volumes declined to their lowest levels since December. These flows continue to play a stabilising role in the region, particularly during evening peak hours, where they act as a price-sensitive balancing mechanism that prevents extreme price spikes above €200/MWh .
Fuel markets added a secondary layer of influence. The CEGH gas price declined further to €44.9/MWh, down €4.4/MWh week-on-week, reaching a seven-week low. At the same time, carbon prices increased to €74.9/t, a nine-week high. This combination improved clean spark spreads by approximately €24.6/MWh for gas-fired units outside Greece, yet this did not translate into higher generation, as renewables continued to displace thermal output from the merit order .
This decoupling between improved generation margins and actual dispatch highlights a critical structural shift. Gas-fired plants are increasingly operating as flexible backup capacity rather than baseload or mid-merit generation, with utilisation concentrated in peak demand periods or during renewable shortfalls. Coal units, while still contributing significantly—particularly in Serbia, where output rose by +292 MW—are also operating below historical levels, constrained by both market economics and environmental considerations .
From a system perspective, the week reinforced the emergence of a pronounced “duck curve” profile across SEE markets. Midday periods are increasingly characterised by oversupply and suppressed prices due to high solar output, while evening hours remain dependent on imports and dispatchable generation, resulting in sharper price spikes. This growing intraday volatility is likely to intensify as additional renewable capacity is added across the region.
Looking ahead, the interplay between renewable expansion, declining demand, and constrained transmission capacity will remain the key determinant of price formation in SEE. While short-term price levels will continue to track broader European trends, regional spreads are likely to remain compressed during periods of high renewable output, with occasional decoupling events driven by local congestion or weather-related supply shocks.
In this evolving market environment, flexibility is becoming the defining asset class. Storage systems, fast-ramping gas units, and cross-border trading capabilities are increasingly critical in capturing value from intraday price differentials. For markets such as Serbia, which remain structurally import-dependent during peak hours, the transition towards higher renewable penetration will require significant investment in both generation and system balancing infrastructure.
Week 16 therefore marks not just another price cycle, but a clear signal of the structural transformation underway in SEE power markets—one in which renewable generation, rather than fuel costs, is emerging as the dominant force shaping both prices and flows.
