Daily capacity auctions in Q2 2026 indicated that market participants placed increasing value on several Southeast European electricity corridors, even as overall electricity trade between the Western Balkans and the EU declined. The auction outcomes were reflected in cross-border capacity prices across multiple borders.
Highest export-direction auction values
The strongest average export-direction auction values were recorded on the Montenegro–Italy and Serbia–Hungary borders. Capacity from Montenegro towards Italy averaged around €8.59/MWh, while Serbia-to-Hungary capacity reached approximately €6.95/MWh. The results were linked to persistent price premiums in Italy and Hungary, limited transmission availability, and strong competition among bidders seeking access to those corridors.
The Serbia–Romania border also showed an increase from a relatively low starting point. In contrast, the highest capacity values on the North Macedonia–Greece and Serbia–Bulgaria borders appeared in the import direction. This pattern aligned with the seasonal return of electricity flows from EU markets into the Western Balkans.
What drives capacity price signals
Transmission capacity prices generally reflect expectations of day-ahead market arbitrage. They are also influenced by available cross-border margins, competition among bidders, network outages, and traders’ expectations at the time of each auction. Q2 showed that short-term corridor value could strengthen even when earlier annual capacity auctions had pointed to more cautious market expectations.
The Serbia–Hungary corridor benefited from a Hungarian price premium and potential additional demand associated with electricity flows towards Ukraine. Montenegro–Italy continued to command a premium due to a substantial Italian market spread and limited capacity of the submarine interconnector.
Diverging patterns across borders
Differing signals across individual borders indicate that Southeast Europe is no longer a single uniform arbitrage region. Corridor-specific fundamentals increasingly shape outcomes, including destination prices, available network capacity, demand conditions, and the ability to demonstrate the required carbon status for exported electricity.
For electricity traders, this raises the importance of hourly and directional analysis. Quarterly or monthly average price spreads can mask short periods of extreme scarcity and high arbitrage value. Transmission capacity assessments therefore need to consider expected generation profiles while balancing exposure with the CBAM status of the underlying electricity supply.
Implications for renewables and contracting
Auction results also carry implications for PPA pricing and project economics for renewable developers. A wind or solar project targeting Hungary or Italy cannot rely only on destination wholesale prices. Project financial models must incorporate the cost, availability, and potential volatility of cross-border transmission rights.
The regional picture places highest value on corridors linking the Western Balkans with structurally higher-priced markets and growing demand centres. Serbia–Hungary and Montenegro–Italy remain central to this structure, while Greece is increasingly positioned as a source of lower-carbon electricity for neighbouring markets.
Q2 2026 outcomes point to a more fragmented, corridor-driven Southeast European power market. In this setting, transmission capacity functions as a strategic asset whose value depends on interactions between price spreads, network constraints, generation characteristics, and CBAM compliance.
