Recent analyses indicate that the power markets in South-East Europe are heavily influenced by import dependence, a critical factor that dictates price formation across the region. On February 24, 2026, net imports reached around 1.75 GW, despite robust contributions from hydro and nuclear energy sources.
Countries such as Serbia, Montenegro, and Albania are particularly vulnerable to fluctuations in import levels. Although electricity prices in these markets often appear discounted, this pricing reflects inherent risk premiums rather than an oversupply situation. Consequently, any tightening of imports can lead to abrupt price adjustments rather than gradual changes, highlighting the volatility in these markets.
On the day in question, hydroelectric power accounted for approximately 35% of total generation; however, the variability of hydro output poses a significant risk. A decline in hydro production can swiftly elevate the marginal cost of gas-fired generation, subsequently driving up prices not only in Serbia but also affecting neighboring markets such as Hungary, Romania, and Greece.
The analysis underscores the importance of incorporating import dependence into models predicting power prices in South-East Europe. Failing to do so can result in a systematic underestimation of market volatility and potential upside risks, which may have implications for regulatory frameworks and market strategies moving forward.
