Recent analyses reveal significant liquidity disparities among electricity exchanges in Southeast Europe, highlighting the varying depths of order books and trading behaviors across the region. Notably, HUPX (Hungarian Power Exchange) and OPCOM (Romanian Power Market Operator) exhibit relatively robust liquidity, characterized by smoother price movements. In contrast, exchanges such as SEEPEX (Serbia), BELEN (Bulgaria), ALPEX (Albania), and MEMO (Montenegro) face challenges with thinner trading volumes and abrupt price fluctuations.
On February 24, Hungary recorded an hourly electricity price range of approximately 46 EUR/MWh to 177.5 EUR/MWh, with transitions occurring gradually. This stability contrasts sharply with Serbia’s SEEPEX, where prices experienced sudden shifts despite being at lower absolute levels, indicating a limited capacity for intraday adjustments.
The analysis indicates that these liquidity gaps create a dual pricing landscape. Core markets benefit from price discovery mechanisms grounded in marginal cost economics, while peripheral markets are affected by execution risk premiums. During periods of market stress, the thinner liquidity in these peripheral exchanges can lead to pronounced volatility, with prices either overshooting or lagging behind fundamental values.
The anticipated growth of market coupling initiatives is expected to alleviate some of these disparities by enhancing interconnectivity among regional markets. However, experts caution that improvements in liquidity will depend not only on regulatory harmonization but also on fostering participant confidence, developing reliable clearing infrastructure, and maintaining transparent balancing mechanisms.
Until there are structural improvements in liquidity, peripheral Southeast European exchanges are likely to continue experiencing heightened volatility relative to their traded volumes.
