Coal-fired generation in South-East Europe continues to play a significant role in the power system, but its long-term trajectory is increasingly defined by structural decline rather than recovery.
In week 16, coal output stood at 4,477 MW, representing a modest increase week-on-week but remaining near the lowest levels observed since mid-2025. Despite improved short-term revenues, driven by higher power prices and relatively stable fuel costs, overall utilisation remains subdued.
Serbia remains the largest contributor, accounting for approximately 38–40% of regional coal generation, with output increasing by 292 MW during the week. However, declines in other markets, including Slovenia and Montenegro, offset these gains.
Year-on-year comparisons reinforce the downward trend, with coal generation across the region 673 MW lower than the same period in 2025. This reflects a combination of factors, including increased renewable penetration, environmental constraints, and evolving market dynamics.
While coal plants continue to provide essential baseload and system stability, particularly during periods of low renewable output, their role is increasingly limited to specific operating windows. Rising carbon costs, with EUA prices reaching €74.9/t, further erode long-term competitiveness.
The concept of a “managed decline” is becoming more relevant, as operators seek to maximise remaining value while preparing for eventual phase-out. This includes optimising maintenance schedules, reducing operating hours, and exploring potential conversion or repurposing options.
For policymakers and system operators, the challenge lies in balancing the need for reliable generation with environmental targets. In the absence of sufficient flexible capacity, coal plants are likely to remain part of the system longer than anticipated, albeit with declining utilisation.