Expert analysis
Hungarian Week-Ahead Electricity Price Reaches a 3.5-Year High – Heatwave, Drought, and Nuclear Output Restrictions Drive the Market
According to Montel News, the Hungarian week-ahead electricity contract climbed to €206/MWh on Tuesday, marking the highest intraday price since December 2022. The market is being primarily supported by the extreme heat forecast for next week, low water levels on the Danube, and the resulting reduction in nuclear generation.
What is driving the market?
- Weather forecasts indicate that average temperatures across Southeast Europe next week will be approximately 3°C above the long-term average, significantly increasing electricity demand for cooling.
- Due to the ongoing drought, hydropower generation is expected to be around 1.2 GW below the seasonal average.
- Low Danube water levels and elevated river temperatures are forcing around 1 GW of nuclear capacity in Romania and Hungary to reduce output, as the river’s use as cooling water is environmentally restricted.
- In Hungary, on Tuesday evening, the output of Unit 3 of the Paks Nuclear Power Plant was reduced by an additional 237 MW, following a 245 MW reduction at Unit 1 on Monday. According to MVM, these are predefined precautionary safety measures required due to the low water level of the Danube and environmental regulations.
- In France, heat-related restrictions also continue. On Wednesday, EDF kept 3.7 GW of nuclear capacity (around 6% of the French nuclear fleet) under output limitations. While this does not pose an immediate security-of-supply risk, it further tightens Europe’s baseload generation availability.
Panic or fundamentals?
Although some market participants believe the Hungarian week-ahead contract is already trading in “panic mode,” regional traders remain considerably calmer.
- Nuclear output restrictions during summer heatwaves are not unusual.
- Romania and Bulgaria can bring additional coal-fired and CHP generation online if necessary.
- Romania maintains that, together with imports, security of supply remains intact.
- In Hungary, the output reductions at Paks are precautionary measures rather than the result of any technical issues at the plant.
What does this mean for the Hungarian market?
The current price increase is primarily driven by extreme weather conditions, reduced nuclear and hydropower generation, and higher import requirements. In the short term, these factors are likely to keep regional spot and week-ahead prices elevated. However, if the heatwave subsides, Danube water levels recover, and nuclear units gradually return to full capacity, the weather-related risk premium could unwind rapidly.
The HUPX Hungarian Power Exchange Day-Ahead Market (DAM) prices have not yet increased to extreme levels. For July 29, the average DAM price reached €132.34/MWh, with a 15-minute peak of €376.69/MWh.
However, it is worth remembering that last week, when oil-fired power plants also had to be dispatched due to tight system balancing conditions, intraday (ID) prices approached €1,000/MWh, while balancing energy prices surged to €3,775/MWh (Georgios Merachtsakis).
Source of the chart: Montel News; HUPX Hungarian Power Exchange Ltd
Analysis written on: Tóth Eszter Lilla
29.07.2026.