Recent developments in South-East Europe’s energy landscape indicate a significant shift towards the expansion of onshore wind power, particularly in Montenegro and Greece. This trend, observed in the January–February 2026 project pipeline, highlights a strategic focus on enhancing seasonal system value rather than merely increasing capacity. Wind energy is increasingly recognized as a crucial stabilizer for winter electricity supply, although it still faces challenges in displacing gas as the primary marginal price setter during peak demand periods.
The Gvozd 2 wind farm expansion in Montenegro stands out as the region’s most advanced project, set to be completed by late 2026. This expansion will increase the Gvozd site’s total installed capacity to 75.6 MW, generating approximately 210 GWh annually—sufficient to power over 35,000 households. Notably, this project builds upon an existing operational asset, allowing developers to utilize established grid connections and operational expertise. This approach reflects a regional trend favoring brownfield projects, which involve lower risks compared to new greenfield developments.
From a system perspective, the significance of Gvozd 2 lies not just in its capacity but in its seasonal output profile. Montenegro’s electricity system is heavily reliant on hydropower, making it vulnerable to hydrological fluctuations. The additional winter-weighted output from wind can help diversify energy sources during periods of low hydro inflows. This seasonal complementarity underscores wind’s strategic importance in markets where summer solar generation increasingly compresses average prices.
In Greece, the wind energy sector is poised for substantial growth, with approximately 340 MW of new capacity added in 2025 alone, translating to an investment of around EUR 420 million. Furthermore, an additional 1.1 GW of wind projects are currently under construction or secured through contracts, with most expected to come online within the next 12 to 18 months. This acceleration follows years of permitting delays and grid congestion that had hindered development.
The resurgence of wind power in Greece is closely linked to ongoing market reforms and improved grid planning. New projects are strategically located in areas with enhanced export capabilities or alongside other renewable sources, thereby reducing risks associated with curtailment. However, challenges remain; high variability in wind output continues to outpace the growth of system flexibility needed to balance supply and demand effectively.
Wind generation has demonstrated a consistent impact on electricity pricing across South-East Europe. During periods of high wind availability, particularly in winter months, there is a noticeable suppression of peak prices and reduced reliance on gas-fired generation. For instance, in January 2026, increased wind availability contributed to lower peak pricing across several markets. Nevertheless, when wind output diminishes or forecast uncertainties arise, systems quickly revert to gas and imports for balance.
This dynamic illustrates a critical aspect of the energy landscape: while wind enhances overall energy adequacy, it does not ensure capacity adequacy at critical moments. The absence of sufficient energy storage solutions or rapid demand response mechanisms means that wind cannot reliably address sudden spikes in demand or manage cross-border congestion issues. Consequently, natural gas remains an essential resource for balancing supply during these critical times.
Grid integration presents another challenge for further wind deployment. In regions like Bulgaria and parts of Greece, existing nuclear and coal baseload generation limits flexibility during high wind production periods, occasionally leading to curtailment or forced exports. Conversely, during low-wind periods, this inflexibility increases dependence on gas and imports. Thus, the interaction between wind generation and traditional baseload resources can lead to both dampened and amplified market volatility.
From a financing standpoint, many new wind projects are increasingly relying on contracted revenue structures such as long-term power purchase agreements (PPAs) and support schemes. This shift minimizes financial exposure for developers but does not fundamentally change the underlying dynamics affecting market prices. For market traders and participants, understanding this distinction is crucial: while wind power can stabilize revenue streams for producers, it does not inherently stabilize market prices.
In conclusion, the role of wind energy in South-East Europe has evolved into that of a seasonal stabilizer rather than a primary price-setter. Its contributions are most pronounced during winter months and extended weather patterns; however, limitations become evident during rapid transitions and peak demand scenarios. Until there is a corresponding increase in flexibility measures alongside wind deployment, its ability to influence marginal pricing will remain limited.
