Recent trends in cross-border electricity flows within South-East Europe (SEE) indicate significant structural changes in the regional power market, highlighting a shift towards partial market coupling with Central European markets. This evolution is underscored by data from week 16, which revealed a notable narrowing of the price spread between Hungary and Germany to €1.38/MWh. Such a convergence has not been recorded since August 2025, primarily driven by an uptick in renewable energy generation across SEE, rather than enhancements in interconnection capabilities.
Simultaneously, imports from the CORE region have plummeted to some of their lowest levels since early 2025, particularly during midday hours when solar energy production peaks in SEE markets. This has led to instances where electricity flows have reversed direction, facilitating exports of surplus generation to neighboring regions.
However, this coupling is not consistent throughout the day. During peak evening hours, as electricity demand surges and renewable output diminishes, SEE markets revert to relying on imports, resulting in renewed price divergence. This creates a hybrid market environment where integration occurs intermittently rather than as a constant state.
Transmission constraints continue to be a significant barrier to full integration of SEE markets with the wider European electricity system. Despite observed improvements in cross-border capacity, these enhancements remain inadequate to eliminate congestion during critical periods, which continues to impact price formation and flow patterns across the region.
The ongoing export flows towards Ukraine and Moldova are noteworthy, marking the 29th consecutive week of such activity. These exports serve a stabilizing function during peak demand times by providing additional outlets for excess generation and helping to mitigate extreme fluctuations in pricing.
The changing dynamics of electricity flows suggest that SEE markets are on a path toward greater integration; however, they remain vulnerable to physical constraints and variations in renewable energy output. This scenario presents opportunities for cross-border trading strategies that can leverage intraday discrepancies in supply and demand across the interconnected networks.
