In South East Europe, cross-border flows often matter as much as generation costs. A country can have enough installed capacity on paper and still experience high prices if imports cannot arrive when needed. Conversely, a market can appear tight domestically but be relieved by imports if cross-border capacity is available.
This is why the region’s electricity-price story is also a transmission story.
ACER’s 2026 monitoring work on Southeast Europe focused on the 2024 price spikes and the structural need for more cross-zonal capacity and flexibility. ACER found that the regional stress was linked to limited flexibility after solar output fell in the evening and to constrained access to lower-priced electricity from neighboring regions.
That finding is crucial. It means that some SEE price spikes were not just caused by expensive generation. They were caused by the inability to move electricity efficiently across the system.
The main flow corridors define the market.
The first corridor is Central Europe into SEE, running through Hungary, Slovenia, Croatia and Romania toward the Balkans and Greece. When Central Europe is long on power and SEE is tight, this corridor should help compress prices. When capacity is constrained, SEE separates and prices rise.
The second corridor is the Hungary-Romania-Bulgaria-Greece axis. This is one of the most important north-south routes in the region. It links Hungarian and Central European liquidity with Romanian hydro, wind, solar and nuclear output; Bulgarian nuclear, coal, solar and storage potential; and Greek solar, gas and summer-demand dynamics.
The third corridor is the Western Balkan loop: Serbia, Bosnia and Herzegovina, Montenegro, Albania, Kosovo and North Macedonia. This is a weather-sensitive and policy-sensitive trading zone. Hydro availability, coal plant performance, Serbian exchange liquidity and explicit capacity auctions can all change regional balances quickly.
The fourth corridor is the Adriatic and Italy connection. Italy’s price dynamics often differ from Balkan prices, and interconnectors to Greece, Montenegro and Slovenia/Croatia can create valuable arbitrage. But these links are also highly sensitive to capacity scarcity and route risk.
The fifth corridor is the Ukraine and eastern-flow dimension. Since Ukraine’s synchronization with the continental European grid, regional flows involving Romania, Hungary, Slovakia and other neighboring systems have become more important to SEE price formation.
Cross-border flows are now also being affected by carbon policy. In Q1 2026, the Energy Community reported that commercially scheduled cross-border exchanges between the EU and the Western Balkans fell by 25%, while day-ahead prices in Contracting Parties were on average €30/MWh lower than in neighboring EU markets. The Secretariat linked this to CBAM-related costs, origin-routing obligations and uncertainty affecting commercial decisions.
That is a powerful signal. Normally, lower prices in the Western Balkans should encourage exports into higher-priced EU markets. If those flows do not materialize, the barrier is not price. It is regulation, carbon treatment, route documentation or capacity utilization.
This creates a new trading reality. Physical flows, scheduled commercial flows and economic price signals can diverge. A trader may see an attractive price spread but still be unable to monetize it because CBAM risk, explicit capacity cost, nomination complexity or origin uncertainty changes the economics.
For traders, this means cross-border analysis must include five layers.
The first is physical capacity: what can actually flow. The second is commercial capacity: what rights are available. The third is market design: coupled or explicit. The fourth is regulatory treatment: REMIT, CBAM, licensing and nomination rules. The fifth is portfolio fit: whether the trader can manage imbalance, collateral and settlement risk.
For policymakers, the message is equally clear. South East Europe does not only need more generation. It needs more usable cross-border capacity, better outage coordination, market coupling and dynamic use of the grid.
In SEE, the border is often the market. The price spread is the signal. The capacity right is the asset. And the ability to move power safely, legally and profitably is the competitive advantage.
