Thermal output regained short-term system value in Southeast Europe during Week 25. Regional thermal generation increased by 19.4% to 5.31 TWh. Gas-fired generation rose by 32.3%, while lignite and coal output climbed by 4.5%. The change reflected a tighter hourly power balance rather than a shift back to old baseload economics.
Gas prices fall as dispatchable output increases
The higher thermal generation occurred alongside lower gas prices. TTF futures fell by 14.8%, but systems still required more dispatchable capacity. Demand increased, wind weakened, and hydro declined in key markets. Thermal plants supplied additional generation during hours when renewable output was insufficient.
Italy, Hungary and Croatia expand thermal production
Italy showed the largest change in Week 25. Total thermal generation increased by 66.7%, with gas-fired production rising by more than 61%. Coal generation almost quadrupled, driven by lower hydro, weaker wind and sustained demand. Italy’s price remained the highest in the region at €127.69/MWh.
Hungary and Croatia also increased thermal generation, mainly through gas-fired output. In Greece, there was no lignite generation, while gas-fired production rose by 16.4%. That increase lifted Greece’s total thermal output by 5.4%. Türkiye shifted from gas toward coal while keeping total thermal generation broadly unchanged.
Adequacy role and changing revenue drivers for thermal assets
The week highlighted that thermal capacity continues to provide adequacy and ramping value during the transition period. The operational question is whether plants are available when solar output falls, wind weakens and hydro is constrained. For investors, the revenue model is shifting toward scarcity-driven earnings rather than continuous generation.
Thermal assets are expected to increasingly earn value from scarcity hours, capacity mechanisms, balancing services and flexibility. This also changes the risk profile for generators, particularly for gas-fired plants facing fuel price exposure, carbon cost and uncertainty around operating hours. In parallel, Week 25 showed that renewables and thermal generation are not substitutes in every hour across SEE.
Renewables remain low-cost; prices reflect hourly interaction
Week 25 indicated that renewables provide low-cost energy while thermal plants continue to deliver firm response. Price formation in the region remains shaped by the interaction between those resources. The pattern is expected to persist until storage, demand flexibility and grid capacity expand materially.