On May 7, electricity prices across Southeast Europe experienced a significant surge, driven by a decline in renewable energy generation and an increased reliance on imports. This trend highlights the growing volatility in the region’s power markets, as supply balances tighten amidst fluctuating production levels.
Benchmark day-ahead prices saw notable increases across major regional exchanges. Hungary’s HUPX and Romania’s OPCOM reported trading near €140/MWh, while markets in Croatia, Slovenia, and Albania also recorded substantial gains. In contrast, Serbia’s SEEPEX remained the lowest-priced market at €114.79/MWh, although this still represented a rise of over 10% day-on-day.
The price rally marked a shift from previous sessions characterized by robust renewable generation and lower midday prices. A sharp drop in regional solar output, approximately 734 MW, along with weakened wind generation, necessitated greater dependence on thermal generation and imports. Consequently, net electricity imports into the SEE and Hungarian market surged to 954 MW, up from a near-balanced position the previous day, as total regional consumption exceeded 28 GW.
This tightening supply-demand balance led to increased thermal generation, with gas-fired output rising by over 100 MW, alongside a boost in coal generation. Market analysts noted that this situation underscores the sensitivity of regional markets to variations in renewable production, despite ongoing investments in solar and wind capacity.
Price differentials against Germany widened after several sessions of compression, with Hungary trading about €4/MWh above German prices. This reflects heightened import demand into Central and Southeast Europe.
The current market dynamics reveal the challenges Southeast Europe faces as it rapidly expands its renewable energy capacity without corresponding investments in storage and grid flexibility. Greece exemplifies these pressures, where renewable curtailments increased by 49% year-on-year during the first four months of 2026. The country also saw nearly 240 hours of zero or negative pricing in the first quarter alone.
The imbalance between growing solar generation and inadequate grid flexibility is accelerating investments in battery storage throughout the Balkans and Central Europe. For instance, North Macedonia’s Oslomej solar complex is set to integrate a 50 MW / 200 MWh battery system, while Hungary’s Alteo has recently commissioned 70 MW of new storage capacity.
Policymakers in the Western Balkans are raising concerns over the European Union’s Carbon Border Adjustment Mechanism (CBAM), which is reportedly distorting regional electricity trade flows. Energy ministers from Montenegro, Serbia, Bosnia and Herzegovina, North Macedonia, and Kosovo have urged Brussels to revise CBAM electricity rules, contending that the mechanism deters EU buyers from purchasing Balkan power exports, including hydroelectric generation.
Montenegro’s state utility EPCG reported that CBAM-related market effects led to a reduction in export revenues by approximately €13 million in the first quarter, despite favorable hydrological conditions boosting production levels.
This pressure is prompting broader state intervention across regional energy markets. Serbia announced plans to acquire a 50% stake in the Plandiste wind project owned by oil company NIS as part of efforts to enhance control over critical energy infrastructure amid global market volatility.
Despite these challenges, forward markets indicate that current spot tightness may be temporary. Hungarian Cal-26 power contracts have eased toward €103/MWh, with regional gas and coal forward prices also showing signs of softening.
The interplay of volatile renewable output, increasing curtailment risks, and rising evening balancing requirements is reshaping Southeast Europe’s electricity market landscape. The transition from a fuel-driven market to one increasingly reliant on flexibility underscores the importance of storage capacity, cross-border transmission access, and hydro balancing capabilities in determining price dynamics.
