June provided one of the clearest indications so far that Southeast Europe’s electricity market is moving beyond a traditional fuel-cost-driven model. During the second half of the month, natural gas prices declined significantly, with CEGH gas falling to €43.06/MWh from €49.35/MWh and Greek gas prices decreasing to €41.37/MWh from €46.14/MWh. However, electricity prices moved in the opposite direction. Hungary’s HUPX increased to €149.01/MWh, rising by €48.7/MWh compared with the first half of June, while Romania’s OPCOM reached €146.80/MWh, up €47.6/MWh. Similar increases were recorded in Croatia, Slovenia and Serbia, with CROPEX reaching €136.67/MWh, BSP Slovenia €134.33/MWh and SEEPEX €114.87/MWh.
The key market message is clear: lower gas prices were no longer the main factor determining electricity prices. Instead, the market began pricing the impact of rising temperatures, higher cooling demand, limited flexibility and increasing evening-hour scarcity. The June rally showed that power prices are becoming increasingly influenced by system conditions rather than only by fuel costs.
The first driver behind the price increase was demand growth. Average electricity consumption across the HU+SEE region climbed to 31,414 MW in the second half of June, compared with 28,054 MW during the first half, representing an increase of 3,360 MW. At the same time, average temperatures in HU+SEE excluding Greece rose from 20.3°C to 25.5°C. The warmer conditions pushed air-conditioning demand higher, particularly during evening hours when solar generation declined and the need for flexible power sources increased.
The generation data reveal an important market trend: the region did not experience an overall shortage of generation capacity, but rather a shortage of flexible capacity available at critical hours. Gas-fired generation increased by 1,177 MW, coal output rose by 476 MW, nuclear generation increased by 922 MW, wind production expanded by 841 MW, and solar generation grew by 894 MW. Hydropower, however, declined slightly by 130 MW.
This combination highlights the changing role of renewable energy in the market. Solar generation continued to reduce daytime prices, but it also increased the need for rapid evening ramping once production declined. Wind generation provided additional supply but did not always coincide with periods of peak demand. Hydropower remained a crucial balancing resource, but available volumes were not sufficient to eliminate the need for additional flexibility.
The most important market signal from June was therefore the widening gap between midday abundance and evening scarcity. Markets such as Hungary, Romania, Croatia and Slovenia experienced significant price premiums during late hours, demonstrating that electricity value is increasingly determined by timing rather than only by total production. Hungary became the region’s main scarcity reference point due to the combination of strong demand growth, dependence on imports, nuclear cooling constraints at Paks and limited flexibility during peak periods.
For market participants, June demonstrated that traditional gas-price indicators are no longer sufficient for understanding Southeast European electricity markets. A more complete assessment now requires analysis of weather patterns, nuclear availability, hydropower conditions, solar generation profiles, cross-border transmission capacity and balancing resources. The month proved that falling gas prices can occur at the same time as rising electricity prices when demand growth exceeds the availability of flexible supply.
For investors, the June market signal reinforces the growing importance of storage, pumped hydro, flexible generation and demand-side solutions. Standalone solar projects face increasing exposure to midday price compression, while hybrid solar-plus-storage projects, wind assets combined with balancing strategies, and industrial power purchase agreements with flexible demand mechanisms offer stronger long-term value.
June was not a contradiction between cheaper gas and more expensive electricity. It was a clear indication that Southeast Europe is entering a new market phase where flexibility, grid capacity and the ability to respond quickly to changing system conditions are becoming the most valuable assets in the power sector.