Wholesale electricity markets across South-East Europe started January 2026 under clear winter stress. Price formation was driven by weather-related demand, gas-linked marginal costs and persistent constraints in regional interconnection. Day-ahead prices across the month showed wide intramonth volatility rather than a smooth seasonal premium.
January began with comparatively contained levels during milder days. In core SEE markets, average day-ahead clearing prices hovered in the €65–75/MWh range. As colder weather spread across Central and Eastern Europe, heating demand rose and system margins tightened.
During colder episodes, day-ahead prices repeatedly moved above €120/MWh. Several trading days recorded peaks close to €130/MWh, particularly in interconnected markets including Serbia, Hungary, Romania and Bulgaria. The spread of outcomes within a single month reflected volatility embedded in regional balance conditions during cold periods.
Second-week jump and hub-level differences
By the second week of January, the upward move intensified. Average weekly prices across the SEE zone rose decisively above €100/MWh. This represented an increase of more than 20% week-on-week compared with early January levels.
On peak stress days, Hungary, Romania and Bulgaria frequently cleared in the €125–136/MWh band. Greece and Türkiye traded at somewhat lower average levels during the same period. The divergence was linked to differences in generation mix, gas exposure and cross-border availability.
Even with those hub-level gaps, elevated clearing prices were visible across nearly all trading locations. The pattern continued to show that winter tightness translated into higher day-ahead outcomes throughout the region. Intramonth swings remained a feature of price formation during January.
Weather, renewables output and gas marginal pricing
The fundamental drivers followed a winter pattern shaped by regional conditions. Cold weather increased load while solar output remained seasonally weak. Wind generation was uneven across SEE during the month.
Hydropower availability improved modestly in some systems but did not provide enough support to suppress marginal prices. Gas-fired generation frequently set the marginal price across the market. This transferred volatility from regional gas markets into electricity price formation.
The gas linkage was described as one of the key transmission mechanisms affecting SEE electricity prices during winter months. As winter demand tightened supply-demand balances, marginal pricing became more sensitive to gas-linked cost signals. That sensitivity contributed to repeated moves above €120/MWh.
Interconnection limits and congestion premiums
Structural constraints reinforced price pressure during January. Limited cross-border transmission capacity, especially on key north–south and east–west corridors, reduced arbitrage opportunities with lower-priced Central European markets during peak stress hours. Congestion premiums were visible in several border directions.
The congestion effects prevented sustained price convergence even when neighbouring systems faced looser supply conditions. These bottlenecks maintained a separation between SEE pricing and parts of Western Europe and some Central European markets. Stronger interconnection and deeper liquidity elsewhere were cited as factors that can dampen volatility.
Wholesale-to-retail pass-through in Western Balkans
Wholesale dynamics also fed into retail and regulated price discussions across the Western Balkans. Several jurisdictions entered 2026 with announced or anticipated tariff adjustments. The changes reflected higher wholesale procurement costs, inflationary pressures and delayed cost recovery from previous years.
Serbia indicated that larger retail revisions are likely later in the year. Other markets moved earlier with tariff updates during January’s period of elevated wholesale pricing. This timing supported a pass-through channel from volatile wholesale outcomes to end-user tariffs.
Regional premium versus parts of Western Europe
In comparative European terms, South-East Europe traded at a structural premium during January 2026. Even excluding the coldest days, average wholesale prices in much of the region remained anchored in the €85–105/MWh range. That level was materially above prices observed during the same period in parts of Western Europe.
The differential reflected more than short-term weather effects. Higher reliance on thermal generation at the margin and weaker interconnection density were cited as contributing factors. Slower deployment of large-scale flexibility such as storage and demand response also featured among the drivers mentioned for SEE’s pricing structure.
The January pattern was presented as consistent with recurring winter market behaviour rather than an isolated event. Seasonal volatility was described as a defining feature for SEE power systems during winter periods. Without accelerated investment in grid reinforcement, regional interconnection, flexible generation and storage, sharp price swings were expected whenever demand rises or renewable output falls.