In Southeast Europe, coal and lignite power generation rose in Week 42 while gas-fired output and overall thermal production declined. Figures from Virtu.Energy data show that thermal generation fell 2.47% to 6,640.75 GWh. The change in the generation mix came as European TTF natural gas prices averaged €86.54/MWh during the week.
Gas-fired generation declined 7.43% to 3,415.40 GWh, while coal and lignite output increased 3.40% to 3,225.35 GWh. Bulgaria raised thermal production by 16.81%, largely through additional coal and lignite generation as electricity demand increased and renewable output weakened. Serbia’s predominantly coal-fired thermal generation rose 5.45%.
Romania increased both coal and gas generation, while Greece substantially raised gas-fired output, moving against the wider regional pattern. In Bulgaria, coal generation responded as renewable production fell sharply and demand rose. Serbia’s coal fleet also increased output amid higher consumption and weaker hydropower generation. Without those plants, both countries would have needed more imports or additional demand-side adjustment.
Carbon costs and the services coal provides
The Week 42 figures show why coal remains capable of supplying large volumes of dispatchable electricity when demand rises or renewable output weakens. That contribution to system adequacy also carries increasing carbon and environmental costs. In EU member states, carbon costs are incorporated directly through the EU Emissions Trading System (EU ETS). For neighbouring Western Balkan markets, deeper integration with European carbon policy and the Carbon Border Adjustment Mechanism (CBAM) increasingly raises the strategic cost of carbon-intensive electricity.
Adding renewable capacity alone does not replace every service provided by coal plants. An economic replacement must cover energy, capacity, reserves, system stability and dispatchability. Wind and solar can replace much of the energy, but cannot independently provide all those system functions.
Storage, grid-forming technologies, hydropower, demand response, regional interconnection and flexible generation are therefore part of the same transition package. The investment question is not whether coal generation will decline over time, but what will provide its flexibility before capacity is retired. That question is particularly relevant as Southeast Europe weighs the cost of continued coal dependence against the need for dispatchable supply.
Renewable investment and price exposure
For lenders assessing new renewable projects, rapid wind and solar expansion without sufficient balancing capacity may bring greater price volatility, curtailment and grid-connection risk. Industrial consumers may face a wider gap between inexpensive renewable hours and costly peak periods. That price pattern strengthens the economics of batteries and flexible demand.
Coal remains operationally relevant in the short term, while the cost of maintaining that dependence continues to rise. Future investments may be most valuable where they enable Southeast Europe to retire coal without increasing exposure to expensive imported gas or volatile cross-border electricity.