The gas–power elasticity gap describes how the same gas-market shock can produce different electricity outcomes depending on location. In Central Europe, gas price moves tend to feed into power prices in a measured, relatively predictable way. In South-East Europe, identical gas signals are more likely to lead to outsized, abrupt electricity price responses. The gap is also linked to seasonal risk framing by ENTSO-E and to observed market behaviour.
System depth and redundancy behind different price responses
In system terms, the elasticity gap is associated with depth and redundancy in gas and power infrastructure. Central European markets such as Germany and Austria operate with large, diversified gas fleets, extensive storage, multiple import routes, and dense transmission meshes. When gas prices change, power prices move as well, but the effect is cushioned by alternatives. South-East Europe operates with thinner dispatchable layers, fewer gas-fired units, and more fragile interconnections.
With less buffering capacity in South-East Europe, gas can become marginal more abruptly. That shift occurs without the same level of system support seen in deeper Central European configurations. As a result, electricity price reactions can be sharper when gas tightness tightens further. The difference is reflected in how quickly power markets adjust under stress conditions.
Pass-through ranges for winter peak pricing
The quantitative contrast shows up in pass-through ratios from gas benchmarks to peak electricity prices. In Central Europe, a €10/MWh change in gas benchmarks typically corresponds to €8–12/MWh movement in peak power prices during winter conditions. In South-East Europe, the same gas move can trigger €25–60/MWh changes in peak electricity prices under stress. The pattern indicates that the magnitude of the response differs even when the initiating gas move is comparable.
This divergence is described as not being driven by how often gas sets prices more frequently in South-East Europe. Instead, when gas does set the price there, it does so alone. That condition affects how much of the gas signal transfers into electricity pricing outcomes. The result is a wider range of electricity price volatility tied to gas movements.
Country structures shaping regional differences
Hungary, while geographically adjacent to South-East Europe, is described as aligning more closely with the Central European model. Its characteristics include gas-fired capacity above 3 GW, access to multiple storage sites, and relatively strong north–west transmission links. These features are presented as part of why its market behaviour resembles the Central European pattern more than the South-East European one. By contrast, other countries rely on different system configurations.
Serbia and Bulgaria are described as relying on far smaller gas fleets than Hungary. The source characterizes their reliance on limited dispatchable layers alongside weaker interconnection resilience compared with Central Europe. This structural setup is linked to more abrupt electricity price responses when gas becomes marginal. The regional elasticity gap therefore varies across national systems rather than applying uniformly across borders.