In the week spanning April 20 to April 26, 2023, South-East European (SEE) power markets witnessed a significant downturn, aligning with a broader correction across Europe. This decline was primarily attributed to robust renewable energy generation coupled with reduced demand. Concurrently, gas markets displayed resilience due to heightened geopolitical tensions, which have established a firmer baseline for forward power pricing.
Day-ahead electricity prices across the region experienced notable double-digit decreases. Croatia and Hungary faced the most substantial reductions, with average prices falling to €72.92/MWh (down 30.3%) and €80.31/MWh (down 27.3%), respectively. Romania and Bulgaria followed suit, with prices decreasing to €86.99/MWh (down 17.5%) and €81.82/MWh (down 16.8%). Greece’s price fell to €78.61/MWh (down 16.2%), while Serbia’s decline was more moderate at €80.41/MWh (down 11.6%), reflecting tighter system conditions relative to its neighbors. Italy maintained its status as the premium market in the region at €109.12/MWh, despite a softer trend compared to the previous week.
This price correction mirrored developments in key European markets, where aggressive declines were observed, particularly in Germany, the Czech Republic, and Slovakia, where reductions exceeded 40%. France’s market collapsed to an unprecedented €7.62/MWh (down 89.3%), indicating extreme oversupply driven by high nuclear and renewable output levels. In contrast, Iberian markets remained relatively stable around €50/MWh, underscoring ongoing regional decoupling within Europe.
Despite the overall downturn in Week 17, early indicators for Week 18 suggest potential upward pressure on prices. As of April 28, day-ahead prices rebounded across SEE, ranging from €97.01/MWh in Greece to €112.66/MWh in Hungary, highlighting persistent volatility and an absence of stable downside in current market conditions.
The demand side reflected a week-on-week decrease of -2.6% in electricity consumption across SEE, reversing previous growth trends. Italy and Türkiye led this decline with contractions of -4.1% each, while Hungary also reported a -4.1% decrease. Conversely, Romania and Greece experienced localized increases of +6.5% and +3.2%, respectively, suggesting recovery linked to weather patterns and short-term economic activity.
A sharp drop in wind generation dominated supply dynamics during this period, with total variable renewable output across SEE declining by -11.3%. This was largely influenced by a significant collapse of -29.3% in wind production, although solar output saw an increase of +8.8%, partially mitigating losses from wind generation. The most pronounced reductions in wind output were recorded in Türkiye (-40.4%), Croatia (-22.9%), and Greece (-16.3%). Hydropower output remained relatively stable at -1.5%, although national variations were significant; Croatia noted a sharp increase of +145.2%, while Serbia, Bulgaria, and Romania saw declines of -23.4%, -27.4%, and -9.8%, respectively.
The thermal generation sector experienced a decrease of -6.4%, primarily driven by a drop of -14.3% in gas-fired output, while coal generation rose modestly by +3.3%. This shift highlights ongoing fuel switching dynamics influenced by gas price fluctuations.
A notable expansion in cross-border flows occurred during the week, with the region’s net import position increasing by +39.7%. Both Greece and Romania transitioned from net exporters to net importers, while Serbia moved further into import territory as well. Italy continued to be the dominant net importer, whereas Croatia enhanced its export position amid a narrowing surplus for Hungary.
The market liquidity remained concentrated with weekly traded volumes reaching 20,340 GWh in Italy, significantly surpassing other markets such as Greece (3,560 GWh) and Bulgaria (2,450 GWh). Serbia’s trading volume remained limited at just 110 GWh, reflecting structural constraints affecting regional price formation.
In gas markets, TTF front-month futures initially extended gains before stabilizing throughout the week; prices increased from €40.29/MWh to a peak of €44.86/MWh, averaging at €43.03/MWh for the week—marking a week-on-week increase of +1.3% . By April 27th , prices slightly eased to €44 .65 /MWh , indicating consolidation near mid-€40 levels.
This upward pressure was largely driven by renewed geopolitical uncertainties surrounding stalled US-Iran negotiations and escalating tensions near the Strait of Hormuz, which have impacted global LNG flows significantly—resulting in an estimated cumulative loss of around120 bcm of LNG supply between 2026 and 2030 , equating to approximately15% of anticipated global supply growth . Such disruptions have postponed expected market loosening by up to two years , reinforcing gas’s pivotal role as a price-setting factor within European power markets.
LNG inflows into Europe presented mixed signals; Greece reported a+22% increase in LNG inflows totaling663 .83 GWh , while Italy maintained its position as the primary entry point with4 ,334 .7 GWh . Conversely , Croatia experienced a sharp decline of-60 .8% , highlighting volatility within regional LNG infrastructure utilization.
The interaction between declining renewable output , fluctuating cross-border flows , and strengthening gas prices indicates that while short-term price corrections remain plausible , the overarching market structure continues to support elevated price levels alongside high volatility throughout SEE power markets.
