On May 7, electricity prices across Southeast Europe experienced a significant increase, driven by a decline in renewable energy generation and heightened import reliance. This trend highlights the increasing volatility within the region’s power markets as supply-demand dynamics shift.
Benchmark day-ahead prices surged across various regional exchanges, with Hungary’s HUPX and Romania’s OPCOM both nearing €140/MWh. In contrast, Serbia’s SEEPEX remained the lowest-priced market at €114.79/MWh, marking an over 10% day-on-day increase. Other countries, including Croatia, Slovenia, and Albania, also reported substantial price hikes.
The recent price rally marks a departure from earlier periods characterized by robust renewable generation that led to lower midday prices. A notable drop in regional solar output of approximately 734 MW was observed alongside weakened wind generation, necessitating increased thermal generation and imports.
Net electricity imports into the SEE and Hungarian market area rose sharply to 954 MW, contrasting with a near-balanced state the previous day. This surge occurred as total regional consumption exceeded 28 GW, while overall generation declined.
The tightening supply-demand balance resulted in a rise in thermal generation; gas-fired output increased by over 100 MW, accompanied by heightened coal production. Market analysts noted that this situation underscores the sensitivity of regional markets to fluctuations in renewable energy output, despite ongoing expansion in solar and wind capacities.
Price differentials against Germany also widened after previous sessions of compression, with Hungary trading around €4/MWh higher than German prices. This reflects growing import demand in Central and Southeast Europe.
This market reaction occurs as Southeast Europe continues to navigate the challenges associated with rapid renewable energy deployment without sufficient investments in storage solutions and grid flexibility. Greece exemplifies these pressures, reporting a 49% year-on-year increase in renewable curtailments during the first four months of 2026, alongside nearly 240 hours of zero or negative pricing within the first quarter alone.
The escalating mismatch between solar generation growth and grid flexibility is prompting increased investment in battery storage solutions across the Balkans and Central Europe. Notably, North Macedonia’s Oslomej solar complex is set to incorporate a 50 MW / 200 MWh battery system, while Hungary’s Alteo has recently brought online 70 MW of new storage capacity.
<pSimultaneously, policymakers from the Western Balkans have raised concerns regarding the European Union’s Carbon Border Adjustment Mechanism (CBAM), which they argue is distorting regional electricity trade flows. Energy ministers from Montenegro, Serbia, Bosnia and Herzegovina, North Macedonia, and Kosovo have urged Brussels to amend CBAM electricity regulations to prevent discouragement of EU buyers from purchasing Balkan power exports—including hydroelectric generation.
The Montenegrin state utility EPCG reported that CBAM-related market impacts led to a reduction of approximately €13 million in export revenues during the first quarter despite favorable hydrological conditions boosting production levels.
This pressure has catalyzed broader state intervention across regional energy markets. Serbia announced plans to acquire a 50% stake in the Plandiste wind project currently owned by oil company NIS as part of efforts to enhance control over critical energy infrastructure amid global market volatility.
Despite current spot tightness, forward markets indicate expectations for easing conditions; Hungarian Cal-26 power contracts have softened toward €103/MWh, with regional gas and coal forward prices also declining.
The interplay between fluctuating renewable output, increasing curtailment risks, and rising evening balancing demands is fundamentally transforming Southeast Europe’s electricity market structure. The transition from a fuel-driven model toward one increasingly reliant on flexibility underscores the importance of storage capacity, cross-border transmission access, and hydro balancing capabilities in determining price dynamics.
