South East Europe’s electricity-price divergence from Central Europe is often linked to generation factors such as coal supply, renewable availability, gas exposure and storage levels, but these explanations are incomplete. The grid is described as an equally important driver of market outcomes. When electricity cannot reach a higher-price area, prices separate. Congested interconnectors or limited cross-zonal capacity can prevent regional stress from being relieved efficiently.
ACER concluded that more efficient use of available network capacity between South East Europe and the rest of the EU could have helped ease regional system stress during the 2024 price spikes. The agency also found that the price gap between Southeast and Central Europe persisted through 2025 and into early 2026. The findings point to structural challenges beyond generation adequacy.
Cross-border capacity limits during 2024 price spikes
Price spikes are not always caused by a lack of total generation. They can also reflect an inability to move electricity across borders at the right time. A region can be surrounded by lower-cost power yet still face scarcity pricing if grid capacity is not available.
Cross-border capacity allocation is therefore treated as a central market issue. ACER recommended finalizing implementation of the EU’s minimum 70% cross-zonal capacity requirement across Central and Southeast Europe. The same set of recommendations includes extending market coupling to non-EU neighbors and expanding flow-based capacity calculation and allocation in the region.
The 70% rule is intended to make transmission capacity available for cross-border electricity trade rather than reserving it for internal grid constraints. In South East Europe, where demand, renewable output and hydro conditions can shift quickly, cross-border access is presented as essential for price convergence.
Market coupling gaps between EU and Western Balkans
Market coupling is identified as a second element affecting outcomes. EU member states participate in integrated day-ahead and intraday markets, while Western Balkan markets are still moving toward full integration. The Energy Community’s Electricity Integration Package is designed to enable Contracting Parties to integrate into the single European electricity market.
Until integration is complete, liquidity remains fragmented. Traders face more friction, and cross-border flows may not respond efficiently to price spreads. Renewable exporters also encounter added complexity, while consumers ultimately pay for inefficiency.
15-minute day-ahead trading from 30 September 2025
The EU’s move to 15-minute day-ahead trading from 30 September 2025 is described as adding granularity to pricing. More detailed intervals are expected to reflect actual system conditions more accurately, particularly with variable renewables. For South East Europe, the value of granular pricing depends on whether electricity can be moved across time and space.
Fifteen-minute prices are described as helping reveal problems rather than solving grid congestion on their own. The ability to allocate cross-border capacity remains central to whether dispatch signals translate into effective physical flows.
Transmission delays affecting solar and wind projects
The grid bottleneck is also linked to renewable development timelines. Solar and wind projects may be quick to build, while transmission upgrades are slower. If generation connects faster than the grid expands, the system can experience curtailment, congestion and lower capture prices.
This creates commercial risk for developers when a technically strong project cannot deliver power when and where it is valuable. The mismatch between connection speed and network reinforcement can therefore affect project economics through operational constraints.
Grid investment alongside market reforms
The text frames grid investment as energy-transition investment rather than secondary infrastructure spending. Transmission lines, substations, digital control systems, dynamic line rating, phase-shifting transformers and better outage coordination are listed as components that enable renewable electricity to become usable electricity.
The investor-facing message is to study the grid before focusing only on resource potential such as solar irradiation or wind speed. It also highlights that PPA terms can be undermined if curtailment risk is poorly allocated. Trading strategies depend on whether cross-border capacity is available.
For policymakers, the stated requirement is that South East Europe cannot address volatility with generation investment alone. The needs listed include transmission reinforcement, market coupling progress, improved capacity calculation, storage and demand flexibility.
The grid is described as the market mechanism through which constrained networks lead to diverging prices. South East Europe’s next electricity-market reform is presented as requiring both physical and institutional changes: building more grid while making better use of existing network capacity.
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