SEE power prices tick up in week 16, but tighter regional spreads signal renewable-driven market shift

Power prices across South-East Europe (SEE) moved higher in week 16 of 2026, but the underlying market mechanics point to a more structural change than a simple fuel-cost-driven tightening. With renewable generation surging and demand easing, regional spreads compressed sharply—suggesting that variable supply is increasingly steering short-term price formation and cross-border flows.

Baseload averages rise across SEE

Baseload prices on Hungary’s HUPX averaged €110.47/MWh, up €18.3/MWh week-on-week and broadly aligned with gains across Central Western Europe. Germany’s baseload rose to €109.09/MWh, 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, while Serbia’s SEEPEX remained the lowest major market at €90.96/MWh.

Regional spreads collapse amid renewable oversupply

The defining development was not only higher weekly averages but the compression of regional differentials. The Hungary–Germany price differential narrowed to just €1.38/MWh from €19.71/MWh the previous week—its lowest level since August 2025.

This narrowing reflects a temporary re-coupling of SEE markets with Central Europe driven by structural renewable oversupply across the region rather than stronger interconnection capacity.

Volatility persists as intraday extremes widen

Even as average prices increased, volatility remained pronounced. HUPX recorded eight hours of negative pricing, down from 22 hours in the prior week, while peak hourly prices reached €278/MWh.

The combination underscores a system increasingly shaped by intraday extremes—especially during periods when renewables push prices down—rather than stable baseload trends.

Demand falls; wind and solar expand

The supply-demand shift behind these dynamics was clear in both consumption and generation data. Total electricity consumption across SEE fell to 28,863 MW, the lowest level since September. The decline was supported by warmer weather (+3.4°C) alongside continued growth in distributed prosumer solar generation.

Demand dropped most notably in Romania and Serbia, while Greece was the only major market to register a modest increase.

On the supply side, renewables surged: wind output rose to 3,047 MW (up 1,143 MW week-on-week), placing generation 23% above seasonal norms. Solar output also expanded, with peak generation reaching 8,198 MW—one of the highest levels recorded this year.

Together wind and solar added roughly 1.75 GW of incremental supply versus the previous week, materially changing the regional balance.

Conventional generation stays subdued as renewables displace it

Conventional output remained comparatively restrained. Coal-fired generation stood at 4,477 MW (only marginally higher week-on-week), while gas-fired generation edged down slightly to 3,144 MW—both near multi-month lows. Hydro fell more sharply to 6,783 MW due to reduced inflows in the Danube basin and operated about 14% below seasonal averages.

This divergence—rising wind and solar alongside weaker hydro availability—reinforces a broader transition: short-term price formation is increasingly driven by variable renewables rather than dispatchable baseload sources. Coal and gas units remain important for stability but are no longer consistently setting marginal prices.

Trade flows swing toward exports; CORE imports ease

The improved regional balance showed up in cross-border trade flows. SEE shifted from net importing -1,172 MW in the previous week to net exporting +195 MW—a swing of about 1,367 MW. Export growth was led by Bulgaria (+870 MW) and Romania (+232 MW), while Serbia stayed a net importer at -245 MW due to continued reliance on thermal generation and comparatively limited renewable penetration.

The reduced need for imports from the CORE region also mattered: flows from Austria and Slovakia into Hungary and Slovenia fell to one of their lowest levels since March 2025. During solar hours when SEE markets ran surplus generation, some midday periods saw flow reversals—signaling how solar-driven intraday dynamics are increasingly influencing transmission patterns.

Ukraine–Moldova exports continue but at lower volumes

Flows toward Ukraine and Moldova remained structurally significant despite declining volumes to their lowest levels since December. The trade pattern extended a 29-week streak of positive exports and continues to provide stabilisation in the region—particularly during evening peak hours where it acts as a price-sensitive balancing mechanism that helps prevent extreme spikes above €200/MWh.

Gas margins improve while dispatch does not follow

Fuel markets added a secondary layer to price formation signals without translating into higher thermal output. The CEGH gas price fell further to €44.9/MWh (down €4.4/MWh week-on-week), reaching a seven-week low, while carbon prices rose to €74.9/t (a nine-week high). Clean spark spreads improved by roughly €24.6/MWh for gas-fired units outside Greece.

However, improved margins did not lead to increased dispatch because renewables continued to displace thermal generation from the merit order.

A “duck curve” emerges; flexibility becomes central

The week reinforced a pronounced “duck curve” profile across SEE markets: midday periods increasingly feature oversupply and suppressed prices linked to high solar output, while evening hours depend more on imports and dispatchable generation—resulting in sharper price spikes later in the day.

Looking ahead, renewable expansion combined with declining demand and constraints on transmission capacity is expected to remain central to how prices form in SEE. Regional spreads are likely to stay compressed during high-renewable periods, though occasional decoupling events may occur due to local congestion or weather-related supply shocks.

In this environment, flexibility is emerging as the key value driver for investors and operators alike: storage systems, fast-ramping gas units and cross-border trading capabilities become critical for capturing returns from intraday price differentials. For import-dependent markets such as Serbia during peak hours, increasing renewable penetration will require substantial investment not only in generation but also in system balancing infrastructure.

Week 16 therefore marks more than another price cycle—it highlights an ongoing structural transformation in South-East Europe’s power markets where renewable output is increasingly dominating both pricing signals and physical power flows.