The power markets in Southeast Europe (SEE) experienced a significant rebound in day-ahead electricity prices on May 18, driven by a sharp decline in wind generation, tighter import balances, and a robust recovery in weekday demand following the weekend lull. The surge in prices reflects the dynamic interplay of supply and demand factors affecting the region’s energy landscape.
Hungary’s HUPX reported a day-ahead baseload price of €143.22/MWh, marking an increase of over €55/MWh day-on-day. Similarly, Romania’s OPCOM closed at €143.19/MWh, Croatia’s CROPEX at €143.24/MWh, and Slovenia’s BSP at €143.18/MWh. This convergence in pricing across Central and Southeast Europe underscores a significant shift in market dynamics. In contrast, Serbia’s SEEPEX remained disconnected from these trends, recording a price of €82.27/MWh, while Albania and Montenegro traded even lower at €61.67/MWh and €84.19/MWh, respectively.
The primary driver behind this price surge was the substantial drop in wind output across the region, which fell by approximately 1,029 MW day-on-day to around 1,651 MW. Solar generation provided some relief with an increase of nearly 978 MW, but the overall generation balance shifted towards thermal and imported marginal pricing during peak evening hours. Notably, several regional exchanges recorded daily maxima exceeding €250/MWh.
As regional consumption rebounded strongly post-weekend, total forecast demand for SEE plus Hungary reached approximately 27.9 GW, an increase of over 1.7 GW day-on-day. Concurrently, net regional imports sharply contracted to only -80 MW, down from over 1.5 GW, tightening local pricing structures significantly.
Despite these fluctuations, hydro conditions remain supportive for the region’s energy mix. Total hydro generation held steady at about 6.3 GW, accounting for roughly 25% of the overall generation mix. Danube flow levels are also notably above long-term averages at approximately 6,848 m³/s, bolstering hydropower performance particularly in Romania and across the Balkans. This robust performance is reflected in the strong financial results reported by hydro-centric utilities such as Romania’s Hidroelectrica and Montenegro’s EPCG.
Romania continues to solidify its position as a leading regional generator, with Q1 2026 electricity production increasing by 8.8%. Hydropower generation surged by 38.3%, while wind output rose by 18% year-on-year. Hidroelectrica’s net profit more than doubled to approximately €263 million, benefiting from favorable wholesale market conditions and enhanced balancing revenues.
The market outlook suggests sustained elevated power pricing into the summer months despite ongoing renewable expansion efforts. Hungarian Week 21 baseload forwards traded around €118.5/MWh, with June 2026 contracts remaining above €113/MWh. EUA carbon prices stabilized around €75.6/tCO₂, continuing to influence coal and gas pricing dynamics throughout the SEE region.
The gas markets also play a critical role in shaping regional energy strategies. CEGH gas prices hovered around €50.67/MWh, while discussions among Greece, Serbia, North Macedonia, and Bulgaria regarding the Vertical Gas Corridor are progressing, aiming to enhance connectivity deeper into the Western Balkans and solidifying SEE’s role as a key transit hub for gas and electricity.
A notable structural divergence persists between fully integrated EU exchanges and the still partially isolated SEE markets. The persistent price gap—approximately €60/MWh below HUPX—highlights how local balancing conditions, generation mixes, and cross-border congestion continue to affect regional pricing dynamics significantly.
The economics of battery storage are improving under current volatility conditions, exemplified by Albania’s planned project involving a combination of 160 MW solar + 60 MW battery, potentially backed by EBRD financing. This shift towards hybrid flexibility assets rather than standalone renewables reflects investor adaptation to changing market conditions.
Thermal generation remains integral to regional balancing structures; coal and gas accounted for about 28% of total SEE+Hungary generation on May 18 despite favorable hydro and solar conditions. The closure of Greece’s 1,595 MW Agios Dimitrios lignite plant has broader implications beyond decarbonization efforts, increasing reliance on gas and flexible balancing capacities.
The evolving market landscape indicates that SEE electricity markets are entering a phase characterized by heightened volatility influenced by factors such as hydrology, solar output fluctuations, evening peak demands, cross-border congestion, and low-carbon electricity demand linked to CBAM regulations. As such, hourly volatility is becoming increasingly relevant for traders and industrial consumers navigating intraday balancing costs.
