During Week 26 (22–28 June 2026), rising temperatures and stronger electricity demand increased reliance on conventional generation across Southeast Europe. Thermal generation rose 24.7% week on week to 6.52 TWh. Gas-fired output increased 25.5% (+803 GWh), while coal and lignite generation climbed 23.6% (+490 GWh). The changes supported system reliability during peak summer demand periods.
Regional market data also show that thermal plants remained central to wholesale price formation during periods of stress. Wind output strengthened in several countries, solar maintained strong daytime production, and hydropower contributed to balancing where available. As hydro output fell and cooling demand increased, gas, coal and lignite units provided most of the flexible generation. These plants set marginal prices across much of the region.
Italy records sharp rise in thermal output and high wholesale prices
Italy illustrated the regional pattern most clearly during the week. Gas-fired generation increased 47.5% versus the previous week. Coal-fired production more than tripled, lifting total thermal generation by 50.8%. The Italian market averaged €144.67/MWh over Week 26.
Italy’s position linking European gas and electricity markets meant its dispatch levels fed into broader trading dynamics. Changes in the country’s thermal generation fleet continued to influence price formation across the Adriatic and Southern European trading region. The week’s thermal increases coincided with one of the highest wholesale price averages reported in the region.
Greece, Serbia, Hungary, Croatia and Bulgaria increase thermal generation
Other Southeast European markets followed similar movements in Week 26. Greece raised gas-fired generation by 12.6%. Lignite-fired power returned to the generation mix after recording no output during Week 25. Serbia increased lignite generation by 17.9%, supporting higher cooling-related demand.
Hungary, Croatia, and Bulgaria also increased thermal electricity production as regional demand strengthened. Romania was the exception, with overall thermal generation slightly lower due to reduced gas-fired output offsetting higher coal generation. Türkiye recorded a modest increase in thermal production, driven by stronger coal generation despite lower gas-fired output.
Flexibility gap keeps conventional plants setting prices
The larger role for thermal power did not indicate a slowdown in the energy transition described by the regional data. Instead, it reflected limited availability of flexible low-carbon capacity that could replace conventional units during peak demand hours. The source data linked this gap to ongoing reliance on dispatchable generation when system stress rises.
The report pointed to investment needs across multiple flexibility options, including battery energy storage systems (BESS), demand response, transmission interconnections, and dispatchable renewable technologies. Until those resources become more widespread, thermal generation is expected to continue playing the decisive role in setting wholesale prices during scarcity periods.
Implications for renewable revenues and corporate PPAs
The market dynamics also affect how revenues may develop for different types of renewable assets. Projects producing mainly during periods of abundant solar output may face increasing price cannibalisation under conditions where prices are shaped by marginal thermal units during stressed hours. Assets able to deliver electricity during high-value evening peak periods were described as positioned for stronger revenues.
The data also highlighted limits for some contract structures during summer demand peaks. Corporate power purchase agreements focused only on annual energy volumes without addressing hourly balancing requirements and peak-period costs may be less cost-effective when elevated demand increases scarcity conditions.
Elevated by Virtu.Energy