Serbia recorded the largest electricity price decline in Southeast Europe during Week 24, with the day-ahead market average dropping 21.5% to €78.22/MWh. The result placed Serbia as the region’s second-cheapest market after Türkiye, where average prices stayed substantially lower. On the same basis, Serbia also logged one of the lowest daily prices in Southeast Europe, reaching €83.87/MWh on June 17.
Price drop linked to supply changes and higher renewables
The decline coincided with shifting supply dynamics rather than weaker demand. Serbian electricity consumption rose by 2.0% to 554.08 GWh. At the same time, renewable generation increased sharply, with wind and solar output up by 76.8%. The expansion of lower-cost generation contributed to a higher share of renewables in market supply.
Even with renewables growing, Serbia’s generation mix continued to rely heavily on conventional sources. Hydropower production fell by 4.2%, reducing flexible generation availability. Coal-fired plants increased output by 66.0 GWh to compensate for lower hydro availability. The price decrease therefore occurred without a full shift away from thermal generation.
Conventional generation and liquidity constraints
The data indicated that renewables were increasingly influencing price formation while coal and lignite remained important for system stability. Beyond the direction of prices, market depth emerged as a key constraint in trading activity. Serbia’s total weekly traded volume reached only 120 GWh, compared with much higher volumes in larger regional markets.
Italy traded 22,300 GWh during the same period, while Greece, Bulgaria, Hungary, Croatia, and Romania recorded substantially higher exchange activity. Although falling spot prices can provide market signals, limited liquidity can restrict participants’ ability to hedge risk and support long-term contracting. It can also limit the establishment of reliable price benchmarks for market participants.
Implications for contracting, balancing and financing
The liquidity issue is particularly relevant for renewable energy investment planning. Developers require transparent and liquid markets that can support bankable power purchase agreements and predictable revenue streams. Industrial consumers also need risk-management tools addressing balancing costs and long-term price exposure. Lenders and investors rely on credible market references when assessing project financing and downside scenarios.
Week 24 signals progress alongside structural gaps
Week 24 showed Serbia’s power market moving in a positive direction while structural gaps persisted. The stronger impact of renewable generation on prices indicated increasing responsiveness of the market to clean energy supply. However, limited trading activity continued to constrain commercial development across the market.
The next phase of Serbia’s power-market evolution depends on more than adding new generation capacity. Strengthening market liquidity, improving grid access, and expanding contractual and financial mechanisms are identified as factors that can help convert lower prices into sustainable investment opportunities.
