Gas-fired plants can raise Southeast European electricity prices during tight supply conditions, when weak hydro output, low wind or thermal outages require them to balance the system. At €90/MWh for gas, fuel alone can cost more than €150/MWh of electricity before carbon, variable operating and start-up costs.
A modern combined-cycle gas turbine operating at around 55-60% efficiency needs roughly 1.7-1.8 MWh of gas input to produce 1 MWh of electricity. When gas units are needed to balance the system, their fuel costs create a high floor for marginal power prices.
Across a gas-price range of €80-100/MWh, fuel costs for an efficient combined-cycle plant are roughly €135-180/MWh of electricity. If EU carbon prices and variable costs remain material, gas-fired generation can support wholesale electricity prices above €170-220/MWh during tight hours. A rise in gas prices above €120/MWh would substantially increase that indicated range.
Cross-border markets transmit gas costs
Gas-fired capacity in Romania, Greece and Hungary can influence regional price formation through cross-border electricity prices. Serbia is indirectly exposed through imports and regional coupling, even when its domestic gas-fired generation is limited. Bulgaria can also be affected through trade with Greece and Romania.
Gas storage and liquefied natural gas developments can move Southeast European power prices even without a local gas shortage. Changes in TTF alter the opportunity cost of gas-fired generation and its position in the electricity bid stack, with price effects able to pass across interconnectors.
The gas-power price relationship is likely to remain strong through winter as heating and electricity demand rise together and hydro conditions remain volatile. Weak wind in Central Europe can increase gas consumption across the wider interconnected electricity system.
Gas is not the sole determinant of electricity prices, but it can become the dominant marginal input under tight winter conditions, especially when heating demand coincides with low renewable output and limited imports. Power traders are advised to monitor TTF, the Balkan Gas Hub and EU ETS carbon prices alongside hydro reservoirs, wind forecasts and cross-border capacity. Price assessments also need to consider plant efficiency and available cross-border capacity together.
