The rapid growth of solar energy generation in Southeast Europe is creating significant challenges for the region’s transmission infrastructure. As photovoltaic technology becomes increasingly cost-effective, large-scale solar projects are proliferating across the Balkans and adjacent EU markets. However, this expansion is outpacing the capabilities of existing transmission systems, which were primarily designed for centralized thermal and hydropower generation.
Historically, electricity networks in this region have focused on transporting power from large baseload plants to urban centers. This design has resulted in grid bottlenecks that hinder the integration of decentralized solar capacity, which is crucial for meeting renewable energy targets. The situation is exacerbated by the concentrated production profile of solar energy, which peaks during midday hours, leading to surges in supply that current transmission infrastructure struggles to accommodate.
Romania’s photovoltaic pipeline has seen remarkable growth, with over 15 GW of projects either proposed or under construction. Bulgaria has similarly connected several gigawatts of solar installations since 2022 and has additional projects pending grid approval. Serbia is also poised to add between 1 and 2 GW of solar capacity through upcoming renewable auctions and private initiatives. North Macedonia and Albania are attracting interest from solar developers as well.
As solar capacity rises, curtailment—where excess generation must be limited to maintain grid stability—poses a growing economic risk for investors. This situation necessitates careful evaluation by developers regarding whether local transmission corridors can handle their output during peak production times. Furthermore, these transmission constraints significantly impact cross-border electricity trading within the interconnected markets of Southeast Europe and Central Europe.
When surplus solar generation occurs in countries like Romania or Bulgaria, it can affect electricity prices in neighboring markets such as Serbia, Hungary, and Greece. However, limited interconnector capacity often leads to price divergences, preventing efficient export of surplus electricity. This paradox highlights the need for enhanced transmission infrastructure: while renewable energy can lower wholesale prices during high production periods, inadequate capacity can restrict access to these benefits for consumers across borders.
Recognizing these challenges, transmission system operators are planning substantial upgrades to their infrastructures. Romania’s Transelectrica is proposing high-voltage corridor expansions to connect renewable-rich regions with major demand centers. Bulgaria’s ESO is reinforcing lines that link solar-heavy areas with cross-border interconnectors, while Serbia’s EMS is involved in regional initiatives aimed at improving electricity flow between the Western Balkans and the EU.
A critical asset in this context is the Italy-Montenegro submarine HVDC cable, which allows electricity generated in the Balkans to be exported directly into Italy. With a capacity of around 1 GW, this interconnector plays a vital role in facilitating renewable exports from Southeast Europe into Western Europe as solar and wind generation continue to rise.
Another emerging issue is the occurrence of negative electricity prices during periods when solar output exceeds demand and transmission limitations are present. This trend, already observed in markets like Germany and Spain, is becoming more frequent in Central and Southeast European regions. Negative pricing indicates a surplus that cannot be efficiently absorbed by the grid, resulting in revenue losses for renewable generators unless they have secured long-term purchase agreements or support mechanisms.
Battery storage technology presents a potential solution to mitigate these challenges by storing excess electricity during peak production periods and releasing it during high demand times. This capability can help smooth out price fluctuations and reduce curtailment while allowing developers to optimize sales based on price variations throughout the day.
The integration of solar energy with storage systems is gaining traction as a key investment trend across Southeast Europe. Hybrid projects combining solar generation with battery storage are becoming more prevalent, enabling participation in both energy markets and ancillary services markets to maximize revenue streams.
Furthermore, enhancing regional electricity market integration through market coupling can improve price convergence and facilitate cross-border flows. By coordinating transmission capacity allocation and market mechanisms, countries can reduce congestion and enhance the efficiency of renewable energy integration.
The ongoing solar boom in Southeast Europe underscores both opportunities and challenges within the energy landscape. While solar technology offers a pathway toward decarbonization and reduced reliance on fossil fuels, it necessitates concurrent investments in transmission infrastructure and storage solutions to avoid congestion, curtailment, and price volatility as deployment accelerates.
The future trajectory of the region’s energy transition will hinge not only on expanding renewable capacity but also on modernizing electricity networks to fully realize the economic and environmental advantages associated with this renewable energy surge.
