Recent market data highlights that Serbia and Montenegro are experiencing persistent price discounts compared to other South-East European power markets. On 24 February 2026, Serbia’s SEEPEX base price was recorded at 56.31 EUR/MWh, while Montenegro’s BELEN cleared at 40.00 EUR/MWh. In contrast, Hungary’s HUPX reported prices around 115.25 EUR/MWh, with Slovenia and Croatia also exceeding 110 EUR/MWh. These significant price differentials are attributed not to oversupply but to inherent structural characteristics of the markets that impose risk premiums on day-ahead pricing.
The liquidity depth in these markets is a critical factor influencing pricing dynamics. Both SEEPEX and BELEN have notably lower trading volumes compared to their counterparts such as HUPX, OPCOM, or BSP. The limited involvement of international trading entities leads to thinner order books, increasing execution risks. Consequently, bids in these markets often reflect conservative risk-adjusted valuations rather than actual production costs, which hinders effective price formation under typical market conditions.
Moreover, the balancing exposure in Serbia and Montenegro further exacerbates the observed discounts. With limited reserve margins and restricted access to fast-ramping capacity, both markets struggle to manage forecast errors—especially during periods of low wind generation or sudden spikes in demand. These imbalances are typically addressed through mechanisms lacking in price transparency, prompting traders to accept lower day-ahead prices as a strategy to mitigate risks associated with imbalance settlements.
Interconnection asymmetries also contribute to the pricing challenges faced by these markets. Despite being connected to higher-priced neighboring markets, congestion often occurs during peak demand hours, limiting export opportunities when price differentials would otherwise support arbitrage actions. This situation creates an asymmetric exposure for traders: local prices tend to decline while potential gains from cross-border access remain uncertain.
The analysis indicates that the structural discounts observed in Serbia and Montenegro are indicative of higher-risk environments rather than merely reflecting lower operational costs. During periods of regional stress, these discounts can diminish rapidly, often within a single trading session, highlighting the optionality of trading in these markets rather than their stability.
