As the energy landscape in Southeast Europe evolves, balancing and flexibility revenues are becoming increasingly significant for renewable electricity producers. By 2025, these revenues emerged as critical components of profitability, shifting the focus from traditional energy volume sales to more dynamic market participation. This transition is largely driven by the growing penetration of wind and solar generation, which has necessitated a more proactive approach to managing grid imbalances.
The growth of renewable generation has outpaced necessary grid reinforcements and market reforms across the region. This imbalance has led to increased forecast errors and balancing costs, with imbalance prices in Romania, Greece, and Bulgaria diverging from day-ahead prices by €20–60 per MWh during peak stress periods. For agile producers capable of navigating these fluctuations, such price spreads present opportunities for profit rather than penalties.
Hydropower operators were among the first to capitalize on this shift. In countries like Croatia, Bosnia and Herzegovina, and Romania, reservoir-based hydro plants adapted their strategies to prioritize flexibility over baseload output. By strategically withholding generation during low-price periods and releasing water during peak demand or balancing windows, these operators achieved price premiums of €15–30 per MWh above day-ahead averages. This operational shift resulted in total hydro revenues increasing by 10–18 percent in 2025 without a rise in annual output volumes.
In 2025, wind producers also began to significantly enhance their participation in balancing markets. Improved forecasting accuracy allowed well-managed fleets in Romania and Greece to reduce forecast errors to 5–7 percent from previous double-digit levels. This improvement not only minimized imbalance penalties but also enabled some producers to sell balancing capacity through aggregation platforms.
Solar producers faced unique challenges due to high forecast accuracy but temporal concentration leading to system stress. The midday overgeneration followed by steep evening ramps necessitated increased balancing efforts. Producers who combined solar with limited storage or flexible hydro access managed to monetize this dynamic effectively. In 2025, solar-heavy portfolios with such flexibility captured €3–7 per MWh in net balancing-related revenues through avoided penalties or participation in regulatory markets.
Greece serves as a notable example of flexibility monetization beyond hydropower. As renewable penetration grew, the transmission system operator increasingly relied on fast-response resources for maintaining system stability. Although dedicated ancillary service markets remained small, flexible renewable portfolios participated indirectly, with wind and hybrid assets earning premiums during stressed conditions that contributed 5–10 percent of total annual revenue for some portfolios.
Romania’s balancing market saw rapid evolution in 2025 due to intensified cross-border flows with Hungary and Bulgaria, leading to increased price volatility alongside enhanced liquidity. Aggregated renewable portfolios that accessed multiple balancing zones managed to mitigate local congestion risks while capturing value from geographic price spreads. Consequently, net imbalance costs dropped from €4–6 per MWh to €1–2 per MWh for producers, translating into an uplift of €3–5 per MWh in realized prices.
Bulgaria’s experience illustrated both risks and opportunities stemming from rapid solar expansion. Frequent midday surpluses coupled with evening deficits led unoptimized producers to incur significant imbalance costs during sudden cloud cover events. In contrast, portfolios equipped with hydro flexibility or contracted reserve capacity stabilized revenues and even generated net balancing income. In 2025, the disparity between the best- and worst-performing solar portfolios exceeded €10 per MWh due primarily to balancing outcomes rather than energy prices.
While Serbia’s balancing market remains constrained compared to its neighbors, trends indicate a growing sensitivity among wind capacities regarding forecast errors amid low-demand periods. Although formal ancillary service revenues for renewables were limited in 2025, avoided imbalance costs effectively functioned as de facto flexibility revenues for well-managed Serbian wind portfolios that achieved a reduction in penalties by 30-40 percent compared to earlier operational years.
The appeal of flexibility revenues lies in their counter-cyclicality; they are largely uncorrelated with energy prices and often peak when systems face stress—periods when energy margins are typically under pressure. This characteristic enhances portfolio resilience against market fluctuations. Furthermore, assets that demonstrate effective participation in flexibility markets inspire greater confidence among investors regarding cash-flow forecasts despite similar headline revenues.
The capital intensity required for monetizing flexibility is relatively low; investments needed for improved forecasting systems or aggregation agreements are typically measured in hundreds of thousands or low single-digit millions of euros rather than tens of millions. Physical upgrades like storage or turbine controls also require modest capital expenditures relative to generation assets but can yield returns exceeding 20 percent driven by avoided penalties and expanded market access.
Flexibility revenues are redefining the strategic role of renewables within Southeast European power systems; they are evolving from mere energy suppliers into active participants capable of absorbing volatility instead of contributing to it. This transformation presents new considerations for regulators and transmission system operators who now view aggregated renewable portfolios as integral solutions for maintaining system stability rather than potential disruptors.
By 2025, while balancing and flexibility revenues had not yet surpassed energy sales as the primary income source for renewable producers in Southeast Europe, they had become substantial enough to influence operational strategies, investment decisions, and asset valuations significantly. As renewable penetration deepens alongside increasing price volatility, this revenue layer is poised for further expansion—a prospect that could offer risk mitigation as well as a sustainable source of incremental profit for early adopters integrating flexibility into their portfolios.
