Renewable swings in Week 16 reshaped power pricing and dispatch across South-East Europe

Electricity markets across South-East Europe in Week 16 were defined by the same force that increasingly shapes the region’s transition: renewable volatility. A surge in wind generation, alongside declining solar output and uneven hydro conditions, created a supply environment that swung quickly between periods of surplus and tightness—forcing system operators to rebalance dispatch and amplifying price movements.

Wind led a regional jump in variable renewables

Total variable renewable energy (RES) output across SEE rose by 21.7% week-on-week to 3,517 GWh. The increase was driven almost entirely by wind, which climbed 74.6%. Solar generation fell 9.4%, reflecting seasonal and weather-related variability.

This divergence made balancing more difficult than usual. Wind output is both less predictable and more geographically concentrated, increasing intra-day swings. Solar typically provides more stable production during daylight hours, but in Week 16 it failed to deliver its usual balancing role—particularly when actual output was weaker than expected.

Country-by-country shifts changed local market conditions

Türkiye became the main driver of renewable dynamics in the region, with total RES generation up 70%, largely from a near doubling of wind output. Greece also saw a strong rise: wind generation increased by more than 150%, offsetting declines in solar output. Italy—already the largest renewable producer by absolute volume—recorded a more moderate increase as stronger wind gains were partially countered by weaker solar production.

Not all markets benefited from the same pattern. Romania and Hungary experienced declines in renewable output tied primarily to sharp reductions in wind generation, falling by over 30% and 40%, respectively. Those drops had an outsized effect locally, increasing reliance on thermal generation and contributing to price increases.

Serbia recorded the highest relative growth from a low base, with renewable output more than doubling. However, its absolute contribution remained limited, highlighting continued dependence on lignite-fired generation and relatively modest renewable capacity.

Hydro offered less stabilization than usual

Hydropower—traditionally a stabilizing element within the SEE mix—provided limited support during the week. Total hydro output declined by 3.45%, with notable reductions in key producing countries including Romania and Bulgaria. While Italy and Croatia posted strong increases that partially offset these losses, the net effect was tighter availability of low-cost generation.

Volatility flowed into prices—and across borders

The combined movement of wind, solar, and hydro produced rapid shifts in available supply that fed directly into day-ahead and intraday volatility. When wind output was strong, prices were suppressed, especially in markets with higher renewable penetration. When wind dropped or shifted geographically, prices spiked as systems turned to thermal generation to close the gap.

Gas-fired plants increased across several markets to provide flexibility for fast-changing conditions. Coal generation declined slightly at the regional level but remained important for baseload provision, particularly in Serbia.

Italy stood out again as a key balancing market: it raised thermal generation substantially to compensate for renewable variability alongside rising demand. Because Italy relies heavily on gas-fired power that often sets the marginal price, its sensitivity to changes in renewable output was particularly evident.

Cross-border flows further magnified these effects. As wind surged in some areas, excess power was exported; where renewables fell short, imports rose to maintain balance. Greece shifted to a strong net export position due to increased renewable output supplying neighbouring systems, while Romania increased imports during its shortfall period.

What investors should take from Week 16

The week illustrates how increasing renewables are changing price formation across SEE: intermittent sources are supplementing—and at times displacing—traditional baseload generation, leading to more frequent and pronounced price swings. For market participants, this creates both value opportunities and risk: flexible assets such as gas-fired plants (and storage facilities) can respond quickly enough to capture value when conditions change rapidly, while traders face higher uncertainty when price signals are less stable.

Flexibility will be decisive as renewables expand

Looking ahead, these dynamics are likely to intensify as policy-driven investment continues adding wind and solar capacity across SEE. At the same time, climate-related factors may introduce additional uncertainty for hydro generation—reducing its reliability as a balancing resource.

In this setting, system flexibility becomes central to market performance. Investments in storage, demand response, and grid infrastructure are positioned as critical tools for managing variability and maintaining stability; without them, the risk of price spikes and system imbalances would rise during extreme weather or low renewable-output periods.

Week 16 therefore offers a clear snapshot of both the challenges and opportunities tied to SEE’s energy transition: renewables have become a central driver of market dynamics rather than a marginal contributor—but their variability requires a different approach to system operation and market design focused on flexibility, integration, and resilience.