Recent analyses highlight significant liquidity disparities across electricity exchanges in Southeast Europe (SEE), particularly between core and peripheral markets. Exchanges such as HUPX and OPCOM are noted for their relatively deep order books, which contribute to smoother price curves. In contrast, markets like SEEPEX, BELEN, ALPEX, and MEMO exhibit thinner participation, leading to sharper intraday price fluctuations.
On 24 February, Hungary experienced an hourly electricity price range from approximately 46 EUR/MWh to 177.5 EUR/MWh. This gradual transition in prices contrasts sharply with the abrupt shifts observed in Serbia’s SEEPEX, which operates with lower absolute price levels but reflects limited capacity for intraday adjustments.
The existence of liquidity gaps has resulted in dual pricing realities within these markets. Core markets are characterized by price discovery mechanisms that align closely with marginal cost economics. Conversely, peripheral markets tend to incorporate execution risk premiums due to their thinner trading volumes. This structural weakness often results in heightened volatility during periods of market stress, where prices may overshoot or lag significantly.
The anticipated introduction of market coupling mechanisms is expected to alleviate some of these disparities by enhancing cross-border trading efficiencies. However, experts caution that achieving improved liquidity depth will depend on various factors beyond regulatory alignment. Key elements include participant confidence in the market, the robustness of clearing infrastructures, and the transparency of balancing regimes.
As the situation stands, until there are meaningful improvements in structural liquidity across these exchanges, peripheral SEE markets will likely continue to experience elevated volatility relative to their traded volumes.
