In Southeast Europe (SEE), the landscape of energy investment is undergoing a significant transformation, with grid infrastructure now recognized as a critical determinant of economic viability for renewable generation and storage projects. Recent analyses indicate that upcoming projects in transmission, substations, and interconnectors are becoming essential components for integrating renewable energy sources into the grid, surpassing traditional considerations such as technology costs.
Montenegro exemplifies this shift with its national transmission system operator, Crnogorski Elektroprenosni Sistem (CGES), planning to invest over EUR 200 million in grid enhancements over the next five years. Central to this initiative are new 110 kV transmission lines, the construction of the 400 kV Brezna substation, and a 400 kV interconnection with Serbia. These developments aim not only to bolster reliability but also to facilitate the integration of future solar, wind, hydro, and storage capacities.
The Brezna substation is particularly pivotal, designed to support high-voltage corridors that will allow for greater renewable energy penetration. It is also expected to underpin a potential second submarine cable connection to Italy planned for after 2028. Without these critical upgrades, Montenegro risks facing curtailment and export limitations on its growing renewable energy capacity.
Further demonstrating the importance of infrastructure is the planned upgrade of the Perućica hydropower plant substation. This project focuses on enhancing operational flexibility rather than increasing generation capacity. By modernizing existing control systems and connections, Montenegro aims to optimize hydroelectric dispatch and better integrate intermittent renewable sources while maintaining system security.
The challenges faced by grids across SEE are not isolated. Similar pressures are evident in Hungary and Romania, where increased cross-border flows and solar saturation have stressed existing infrastructure. Although these issues may not always be categorized as specific projects in market analyses, they have tangible impacts on price spreads and curtailment risks throughout the region.
The synergies between grid assets and energy storage technologies underscore their growing significance. Projects such as Bulgaria’s Maritsa East 3 battery storage facility are strategically situated to leverage existing grid connections from former coal operations, thereby avoiding protracted processes for new grid access. This trend indicates that legacy grid access is becoming increasingly valuable in the context of the energy transition.
Interconnectors serve a dual purpose by enhancing supply security while also increasing price correlations across markets. The anticipated Montenegro-Serbia 400 kV link will not only improve regional power balancing but will also facilitate renewable energy exports. However, it will also transmit market volatility more rapidly during periods of stress, illustrating that grid expansion redistributes rather than eliminates price risks.
From an investment perspective, grid projects present a distinct risk-return profile compared to traditional generation assets. Their revenues tend to be stable and regulated over the long term. However, their strategic importance is amplified by their capacity to unlock further private investments in renewables and storage solutions. This has led institutional investors to show increasing interest in grid infrastructure due to its lower volatility compared to other sectors within the energy transition.
The conclusion drawn from recent analyses is clear: grid infrastructure projects are emerging as keystone elements in SEE’s transition toward sustainable energy solutions. The successful integration of solar, wind, hydroelectric power, and battery storage relies heavily on robust transmission capabilities and connection points. Markets that neglect investment in their grids may face escalating curtailment rates, volatile pricing environments, and stranded renewable assets. Conversely, those prioritizing modernization efforts stand poised to fully realize the benefits of flexibility and decarbonization.
