By 2025, balancing and flexibility revenues have become increasingly significant for renewable electricity producers in Southeast Europe, marking a shift in market dynamics. Historically, balancing markets were seen primarily as technical necessities, but the growing penetration of wind and solar energy has transformed them into vital commercial opportunities. This evolution allows renewable producers to monetize their ability to manage output and respond to system imbalances, creating an additional revenue stream alongside traditional energy sales.
The rapid growth of renewable generation has outpaced necessary grid enhancements and market design reforms across the region. This discrepancy has led to increased forecast errors and intraday volatility, resulting in higher balancing costs. In 2025, imbalance prices in Romania, Greece, and Bulgaria frequently diverged from day-ahead prices by €20–60 per MWh during periods of stress, particularly influenced by weather conditions. For producers adept at managing their positions, these price spreads presented opportunities rather than penalties.
Hydropower operators were among the first to adapt to this changing landscape. In Croatia, Bosnia and Herzegovina, and parts of Romania, reservoir-based hydro plants shifted their operational strategies to focus on maximizing flexibility value instead of merely increasing baseload output. By strategically withholding generation during low-price hours and releasing water during peak demand or balancing windows, these operators captured price premiums of €15–30 per MWh above day-ahead averages. Consequently, total hydro revenues rose by 10–18 percent in 2025 without an increase in annual output volumes.
Wind producers also began to engage more actively in balancing markets by improving forecast accuracy and intraday nomination practices. In Romania and Greece, well-managed wind fleets reduced forecast errors to 5–7 percent, down from double-digit levels earlier in the decade. This improvement minimized imbalance penalties and allowed some producers to sell balancing capacity indirectly through aggregation platforms.
Solar energy producers faced unique challenges due to high forecast accuracy but temporal concentration that created system stress. Midday overgeneration coupled with steep evening ramps increased the need for balancing services. Producers who combined solar with limited storage or access to flexible hydro resources managed to monetize this dynamic effectively. In 2025, solar-heavy portfolios with such access captured €3–7 per MWh in net balancing-related revenues through avoided penalties or participation in regulation markets.
Greece exemplified successful flexibility monetization beyond hydro resources. As renewable penetration increased, the transmission system operator relied more heavily on fast-response resources for maintaining frequency and voltage stability. Although dedicated ancillary service markets remained relatively small, flexible renewable portfolios participated through indirect mechanisms. Wind and hybrid assets capable of rapid response earned premiums during stressed intervals, contributing 5–10 percent of total annual revenue for some portfolios.
Romania’s balancing market saw rapid evolution in 2025 as cross-border flows with Hungary and Bulgaria intensified. Price volatility increased alongside liquidity. Aggregated renewable portfolios with access to multiple balancing zones mitigated exposure to local congestion while capturing value from geographic price spreads. This shift allowed producers to reduce net imbalance costs from €4–6 per MWh down to €1–2 per MWh, translating into a €3–5 per MWh uplift in realized prices.
Bulgaria highlighted both risks and opportunities stemming from rapid solar expansion that generated frequent midday surpluses and evening deficits. Unoptimized producers faced significant costs for imbalances during sudden cloud cover events. Conversely, portfolios with access to hydro flexibility or contracted reserve capacity stabilized revenues and sometimes earned net balancing income. In 2025, the performance gap between the best- and worst-performing solar portfolios in Bulgaria exceeded €10 per MWh due largely to balancing outcomes rather than energy prices.
Serbia’s balancing market remains constrained; however, trends indicate growing sensitivity to forecast errors due to increased wind capacity. While formal ancillary service revenues for renewables were limited in 2025, avoided imbalance costs functioned as a de facto source of flexibility revenue. Well-managed Serbian wind portfolios reduced balancing penalties by 30–40 percent compared to earlier operational years, resulting in millions of euros of incremental EBITDA across the fleet.
From a financial standpoint, flexibility revenues are appealing because they are largely uncorrelated with energy prices; they tend to peak when systems are under stress—often when energy margins are tightest. This counter-cyclical nature enhances portfolio resilience. Assets demonstrating flexibility participation command greater confidence in cash-flow forecasts despite similar headline revenues.
The capital intensity associated with monetizing flexibility is relatively low; investments required for improved forecasting systems and aggregation agreements are typically measured in hundreds of thousands or low single-digit millions of euros rather than tens of millions. Where physical flexibility is necessary—such as limited storage or turbine control upgrades—capital expenditures remain modest compared to generation assets, often yielding returns exceeding 20 percent driven by avoided penalties and expanded market access.
Importantly, the emergence of flexibility revenues alters the strategic role of renewables within Southeast European power systems. No longer merely sources of energy volume, renewables are evolving into active participants capable of absorbing volatility rather than contributing to it. This shift carries implications for regulators and transmission system operators (TSOs), who increasingly recognize aggregated renewable portfolios as integral components for ensuring system stability.
As of 2025, while balancing and flexibility revenues had not yet surpassed energy sales as the primary income source for renewable producers in Southeast Europe, they had grown sufficiently influential to impact operating strategies, investment decisions, and asset valuations significantly. As renewable penetration deepens alongside increasing price volatility, this revenue layer is expected to expand further. For producers who proactively integrate flexibility into their portfolios, balancing markets provide not only risk mitigation but also a sustainable source of incremental profit.
