OREANDA-NEWS. Spot power prices in Hungary, Serbia and Croatia reached record highs for delivery tomorrow amid cold weather, unplanned plant outages and weak hydrological conditions, pushing the Hungarian week ahead above Italy intra-day. And network security measures in Greece have prompted a halt to exports for the next two days, blocking any potential transit flows through Macedonia and Albania to Serbia and Hungary.

The Hungarian Hupx, Serbian Seepex and Croatian Cropex spot prices settled at €150.02/MWh, €151.31/MWh and €158.79/MWh for base load, respectively, for delivery tomorrow, the highest on record for each exchange. Tomorrow's prices follow prices spikes for delivery today, with Seepex reaching €122.46/MWh, Hupx and Cropex hitting €97.09/MWh and €98.35/MWh, respectively, while Bulgaria's Ibex exchange hit a record high of €125.90/MWh.

The price surge comes amid a severe cold snap across the region, which has boosted demand, while river levels remain significantly below seasonal norms, pressuring hydropower generation. The effect has been exacerbated by unplanned power plant outages at base-load units in Hungary, increasing the call on gas burn to make up the shortfall as well as a cut to imports from the south. Hungarian gas-fired generation has risen by around 300MW so far today, despite an outage at the 390MW Dunamenti gas-fired power plant, with total gas burn at 1.4GW compared with 1.1GW on average yesterday and less than 1.2GW on average in the first nine days of January. Unplanned outages at the 1GW Matrai lignite-fired power plant had taken lignite-fired output to below 130MW this afternoon, after it had been as high as 350MW yesterday. The 2GW Paks nuclear power plant was steady at close to full capacity, but 250MW is due to go off line on 13-15 January.

Greek grid operator Admie today curtailed export capacity on all its borders for 11-12 January for "network security reasons", blocking the potential flow of power from Greece through Macedonia, Bulgaria and Albania to Serbia and Hungary. Temperatures in Athens have dropped below seasonal norms, reaching 0°C as snow has fallen in the capital, pushing demand to its highest since August 2015 while renewable and hydropower generation have fallen. And 500MW of potential Greek import capacity remains unavailable with the Italy-Greece interconnector still off line because of an unplanned outage, with no scheduled restart date.

Temperatures in Belgrade, Bucharest and Budapest are predicted to reach overnight lows of around minus 14°C, compared with seasonal norms of about minus 1°C, and are expected to fall back to similar levels next week after a brief period of milder weather at the end of this week.

Regional hydrological levels are expected to continue falling, as rivers continue to freeze, threatening hydropower output. River levels on the Danube river at Bezdan, Serbia, are forecast to drop to minus 30cm this week - against a 0cm baseline - compared with an average of 16.4cm in January last year, while parts of the Danube, Sava and Tisa are freezing. And Danube river flow levels at Bazias in Romania are forecast to drop to 2,150m?/s within seven days from 2,450m?/s now and compared with a seasonal norm of 4,950m?/s for January.

Unusual premium

The spot price spikes and fundamentals outlook are prompting strong gains on near-term prices in Hungary, with the week ahead trading at an unusual premium to Italy earlier today. Italy usually acts as a cap for Hungarian power prices on the basis that Hungary could pay to import Italian power through Slovenia and Croatia if demand was sufficient. The week ahead in Hungary reached an intra-day high of €80/MWh while Italy was trading at €76/MWh, although the two markets had converged by around midday.

In Bulgaria, the Ibex spot fell to €53.05/MWh for delivery tomorrow as supply on the exchange increased, but it had reached a record high of €125.90/MWh for delivery today. Temperatures in Sofia have dropped as low as minus 15°C, but the Bulgarian price surge was also caused by a curtailment in supply from the market makers - the Kozloduy nuclear power plant, hydropower generator Nek and the Maritsa Istok 2 coal-fired plant - on the Ibex trading platform.

Under a binding agreement between the European Commission, state-owned holding firm Bulgarian Energy Holding (BEH), which is the owner of the largest power plants in Bulgaria, is obliged to provide a certain level of liquidity during the first five years of Ibex's operation. The market makers' obligations for Ibex were set at 300MW in 2015 and are expected to reach 800MW by 2020.

But only around 203MW was offered on the day-ahead market for delivery today, compared with 385MW on 9 January and 334MW on 11 January. The drop was mainly because of the inability of BEH to meet its market-maker's obligations, according to Ibex. The market makers have decided not to sell on Ibex on request from Bulgarian grid operator ESO to provide surplus electricity to meet today's record peak demand. ESO executive director Ivan Yotov announced today that Bulgaria is considering suspending power exports in order to prevent potential domestic power outages and to cover domestic demand.

The Romanian energy ministry today declined a request from Bulgaria for emergency imports of electricity because of high peak consumption in Romania, where demand increased by 10pc on the year 9.2GW today, Romanian grid operator Transelectrica said. Peak Bulgarian demand was expected to reach 7.7GW today, and despite the refusal of power from the Romanian grid, Bulgaria was able to cover the demand, ESO said today.

Some traders in Bulgaria have said that they needed to be notified in advance that BEH will not be able to meet its pre-determined liquidity level. One trader said BEH was in breach of its market-maker agreement without its actions being justified on force majeure grounds. Some power traders attempted to sell imported electricity on Ibex at a premium on 11 January in an attempt to take advantage of the high prices, but were not successful because power producers increased their supply to Ibex after a number of protest letters were sent to the energy ministry today.

Bulgarian energy minister Temenuzhka Petkova said today that the power system load had reached a 20-year high as demand rose above 7.5GW. The reason for the request for emergency power transfer from Romania stemmed from problems with the activation of cold reserve capacity at two coal-fired power plants, Bobov Dol and Rousse, she said, adding the energy system remains stable.