In a significant move towards modernizing its electricity market, Serbia is set to introduce negative electricity prices on the Serbian Power Exchange (SEEPEX) starting in May 2026. This initiative is part of a broader strategy aimed at aligning the country’s trading practices with European standards and enhancing market efficiency.
The introduction of sub-zero pricing is expected to refine price formation mechanisms by enabling electricity prices to dip below zero during times of excess supply. This adjustment will provide more accurate signals for market participants, facilitating better decision-making and resource allocation. Furthermore, it marks a crucial step in Serbia’s path toward integration into the EU coupled electricity market, contingent upon successful technical testing prior to implementation.
The first auction featuring negative pricing on the day-ahead market is scheduled for 5 May 2026, with actual electricity delivery occurring on 6 May. For the intraday continuous market, trading at negative prices will commence after 23:00 CEST on 5 May, allowing for real-time adjustments based on market conditions.
This new pricing structure will also modify SEEPEX’s price limits. The existing minimum clearing price of 0 euros/MWh will be replaced with a new floor of -500 euros/MWh for the day-ahead market. Meanwhile, the intraday market will see a lower limit extended to -9,999 euros/MWh, which aligns with harmonized standards across the European Union.
In addition to these changes, SEEPEX has clarified the tax implications associated with negative pricing. According to Serbian VAT regulations, a negative electricity price is classified as a payment for services rather than a conventional commodity transaction. Consequently, a 20% VAT will apply only to domestic companies engaged in selling electricity at negative prices, while foreign entities must navigate their own national tax regulations.
As Serbia prepares for this transformative change, SEEPEX has advised its clearing members and trading participants with active cash limits to reassess their exposure and adjust financial limits accordingly. This proactive measure is essential due to the potential impacts that negative pricing could have on settlement and risk management.
