Gas output falls across South-East Europe as renewables and hydro cut into marginal dispatch

South-East Europe’s power mix continued to show a clear shift in calendar week 13, as higher renewable and hydro availability reduced the need for gas-fired generation—fuel that typically sets prices in most markets. For investors and traders, the move matters because it affects both generation levels and the mechanics of price formation when demand softens or variable supply rises.

Thermal generation down, with gas hit hardest

Total thermal generation fell by 7.24% across the region during the week. Gas-fired output declined by 12.78%, indicating that gas units were the first to be displaced when conditions favored renewables and hydro.

The reduction is consistent with merit-order effects: when renewable availability improves and hydro contributes more power, marginal gas units are pushed out of dispatch. That displacement not only lowers gas generation but also drags down overall thermal output.

Country moves highlight different drivers

Italy recorded the largest decline in thermal output, down 24.75%, driven by a reduction in gas-fired generation of over 26%. Hungary also saw a steep fall of 24.58%, while Serbia posted a sharp contraction of 48.71% that was primarily attributed to reduced lignite generation rather than gas alone.

Coal and lignite largely stable; some markets buck the trend

Despite weaker gas performance, coal and lignite generation remained broadly stable, declining by only 0.66%. The data suggests these fuels continue to provide base-level supply, especially in markets with meaningful domestic coal resources.

In contrast, thermal generation rose in some places. Bulgaria and Türkiye both recorded increases, with Türkiye showing strong growth in both coal and gas output—aligned with a surge in electricity demand.

Implications for pricing: modest declines, but marginal influence persists

The decline in gas-fired generation contributed to modest price declines observed during the week. Still, because gas remains the marginal price-setting fuel during peak periods in most SEE markets, its influence on price formation continues to dominate when demand tightens or renewable output falls.

Overall, the week’s pattern reinforces the transitional character of South-East Europe’s power systems: renewables are increasingly displacing gas during favorable periods, while coal—particularly where domestic resources are available—continues to anchor supply.