In January 2026, South-East Europe’s electricity markets experienced a significant re-emergence of price divergence, reversing the convergence trend that had characterized parts of late 2025. Average monthly electricity prices varied markedly across the region, with Romania and Hungary recording prices of €150.51/MWh and €150.41/MWh, respectively, while Greece and Türkiye reported much lower averages of €108.67/MWh and €57.42/MWh. This disparity underscores the ongoing structural segmentation in pricing, despite existing physical interconnections among these markets.
The observed divergence was not driven by demand fluctuations, as regional consumption patterns showed uneven growth. Serbia led with a remarkable +33.43% month-on-month increase, followed by Croatia at +22.42% and Bulgaria at +17.51%. In contrast, Hungary and Romania experienced more modest consumption changes. Instead of demand, the price variations were primarily influenced by marginal supply conditions, fuel exposure, and the elasticity of imports.
Romania and Hungary established the upper limits for electricity prices during this period. Both countries faced challenges related to declining hydroelectric generation and increasing gas-linked marginal costs, leading to a heightened dependency on imports during peak demand hours. Specifically, Romania’s average price of €150.51/MWh coincided with a -16.04% drop in hydro generation, while Hungary’s price of €150.41/MWh reflected a system reliant on 34.03% net imports, despite maintaining strong nuclear energy output.
<pConversely, Greece managed to maintain lower electricity prices amidst regional escalation, primarily due to a substantial +155.37% increase in hydro generation. This surge allowed Greece to displace gas generation at the margin and mitigate exposure to volatility in the Title Transfer Facility (TTF) market. Serbia also benefited from increased hydro production, which rose by +186.06%, helping stabilize prices despite robust demand growth.
The events of January highlight a critical aspect of South-East European power trading: market convergence is not uniform and tends to collapse under stress conditions. The divergence indicates that systems heavily reliant on gas and imports tend to experience sharp repricing, while those rich in hydro resources can decouple temporarily from regional trends.
This month’s developments reinforce the necessity for traders and market participants to view South-East Europe as a complex, multi-node risk environment rather than a singularly converging market block.
