Southeast Europe is entering the 2026-27 winter with a growing shortage of power-system flexibility, as grids, storage and dispatchable capacity lag behind expanding energy projects and rising volatility. A regional assessment identifies flexibility, rather than a lack of generation projects, as the main constraint on absorbing a more variable power system.
The assessment’s country examples include Serbia, which is importing heavily after weak hydro output, and Kosovo, which is missing a 260 MW lignite unit. Romania has extended an energy emergency while nuclear capacity is unavailable. Croatia experienced roughly 220 hours of negative electricity prices in the first half of 2026 and is beginning to price the value of batteries.
Bulgaria has moved unusually quickly on storage, in contrast with the slower development of flexibility and storage in the Western Balkans. IENE cites operating battery capacity in Bulgaria of 6.23 GW and more than 19 GWh, alongside 7.3 GW of solar capacity. Bulgaria is seeking to turn solar oversupply and intraday volatility into dispatchable value through storage.
New debt financing for the Tenevo battery project, with a capacity of 246 MW and 512.5 MWh, reinforces a shift from grant-supported deployment toward bankable infrastructure.
Montenegro is announcing partnerships covering solar, wind and battery energy storage systems, while Croatia is assembling portfolios of standalone and co-located storage. North Macedonia has started auctioning guarantees of origin. Across the region, grid capacity, permitting, financing and market depth remain constraints. Projects are multiplying faster than the institutions and flexibility assets needed to integrate them, creating a two-speed transition.
The assessment says power-market value is shifting from installed megawatts alone toward capacity able to shift, store, balance or move electricity across borders. It identifies batteries, pumped storage, transmission, interconnectors and dispatchable supply as the strongest Southeast European investment theme, with flexibility also favouring pumped hydro and flexible gas assets. Systems dependent on ageing thermal units or weather-sensitive hydro without sufficient balancing capacity face higher costs.
