On March 31, 2026, power markets across South-East Europe (SEE) witnessed a remarkable increase in day-ahead prices, driven by tightening system fundamentals, heightened demand, and escalating gas input costs. This surge marks one of the most substantial coordinated price gains observed in recent weeks, indicating a return to a firmer pricing regime across the region.
Day-ahead baseload prices surged across all major exchanges. Serbia’s SEEPEX reported a clearing price of €157.8/MWh, reflecting an increase of €51.8 day-on-day, the most significant rise in the region. Hungary’s HUPX saw its prices climb to €148.4/MWh (+€9.7), while Romania and Bulgaria recorded similar levels at approximately €141.2/MWh, each gaining between €6–8/MWh. Greece’s market reached €133.8/MWh (+€15.8), and Albania topped the regional chart with a price of €188.1/MWh (+€45.8). Montenegro, while still the lowest-priced market at €119.9/MWh, also noted a daily increase of €18.2/MWh.
This price rally reflects a synchronized tightening across the SEE system rather than isolated national dynamics, with market coupling effects and cross-border flows increasingly influencing price formation. The regional consumption level rose to 35.7 GW, an increase of +584 MW day-on-day, alongside net imports climbing to 2,009 MW (+408 MW). This trend indicates a growing reliance on external supply, particularly from Central Europe, where inflows from Austria and Slovakia reached 4,133 MW.
The generation mix reveals significant cost pressures within the market. Gas-fired output increased by +558 MW, reinforcing its role as the marginal price-setting technology. Hydro output also rose by +670 MW, providing some relief but failing to counteract broader tightening trends. Meanwhile, solar generation expanded by +459 MW, yet it remained inadequate in mitigating evening peak prices. Coal output declined by -521 MW, reflecting both economic and structural displacement amid high carbon costs.
Intraday price profiles indicated pronounced evening peaks, with hourly prices surpassing €230–270/MWh. Minimum levels remained elevated above €100/MWh, signaling sustained system stress rather than temporary volatility. This widening intra-day spread underscores the increasing value of flexible generation and storage assets.
<pCross-border flows confirm a tightening regional dependency on imports, with the SEE region remaining structurally short of supply. Strong inflows from Central Europe have been pivotal in anchoring prices within the region. Notably, the Hungary–Germany price spread narrowed sharply to €30.6/MWh, collapsing by around €50/MWh day-on-day. This suggests rapid price convergence with core European markets.
The compression of spreads reduces arbitrage opportunities and indicates that SEE markets are becoming more integrated into broader continental pricing dynamics. However, such rapid convergence phases often lead to renewed volatility if underlying fundamentals diverge again.
The fuel markets continue to support this bullish sentiment in power pricing. Austrian CEGH gas traded around €56.9/MWh, marking a modest increase, while EU carbon allowances maintained an upward trajectory. Although coal prices remain under pressure, the combination of gas and carbon costs continues to shape the marginal cost structure across the region.
Looking ahead, forward curves suggest a more nuanced outlook for power pricing. Week-ahead power contracts showed declines of -10% in Hungary and nearly -20% in Germany, while gas forwards softened by approximately 6–8%. This divergence implies that current spot strength may not translate into sustained forward pricing, suggesting short-term tightness but expectations for easing conditions in upcoming months.
A significant structural development is Serbia’s SEEPEX exchange confirming the introduction of negative pricing effective May 2026, featuring a day-ahead floor of -€500/MWh and intraday limits extending to -€9,999/MWh. This move aligns Serbia with European market standards and is anticipated to significantly heighten price volatility during periods of high renewable output.
This transition introduces complexities into risk management and trading strategies for market participants as negative pricing regimes typically enhance the value of flexibility in energy assets capable of rapid response, including battery storage and demand-side management solutions.
The immediate future will likely be shaped by demand recovery coupled with limited baseload flexibility and elevated marginal costs tied to gas supplies. While hydro conditions have improved slightly, they remain insufficient to alleviate overall system pressure significantly; renewable output continues to exhibit variability that exacerbates intraday volatility.
The interplay between tightening spot fundamentals and softer forward expectations characterizes the current market phase in SEE power markets. Prices are increasingly influenced by real-time system stress rather than long-term scarcity signals, resulting in sharp daily movements, narrowing spreads, and heightened sensitivity to weather patterns and cross-border flows.
The ongoing integration with European markets and preparations for structural changes such as negative pricing signal that SEE power markets are entering a more complex phase where volatility, flexibility, and cross-border positioning will be crucial for future price formation.
