Day-ahead prices across Southeast Europe moved closer together during the second quarter of 2026, but the apparent convergence was driven mainly by falling EU wholesale prices rather than a full restoration of cross-border market integration.
Italy’s average day-ahead price declined from €130.3/MWh in Q1 to €120.9/MWh in Q2, while Hungary fell from €127.5/MWh to €109.2/MWh. Romania dropped to €109.4/MWh, Croatia to €103.3/MWh and Bulgaria to €96.8/MWh. Western Balkan prices moved far less. Serbia averaged €96.3/MWh, Montenegro €93.6/MWh, North Macedonia €91.6/MWh, Kosovo €89.0/MWh and Albania €88.6/MWh. Greece remained closely aligned with the lower-priced Balkan group at €90.2/MWh.
The adjustment sharply reduced several cross-border spreads. The average Montenegro–Italy difference narrowed to approximately €27.2/MWh, compared with around €44/MWh in the first quarter. Hungary remained about €12.9/MWhabove Serbia, while Serbia and Bulgaria approached parity, separated by only €0.5/MWh. Albania and Greece were divided by just €1.6/MWh, while North Macedonia was slightly more expensive than Greece.
Under normal market conditions, such compression would be interpreted as a return towards integration. The Q2 pattern is more complicated. EU benchmarks fell because of softer seasonal demand, lower gas-linked marginal costs and stronger spring solar and wind output. Western Balkan prices were comparatively stable and in several cases increased. Montenegro rose by about €7.8/MWh, Albania by €4.7/MWh, while Serbia and Kosovo increased by around €1.6/MWh. Only North Macedonia declined materially.
Price correlation with Hungary also recovered. Serbia reached approximately 0.91 by the end of June and Montenegro around 0.82, close to levels normally associated with interconnected markets. North Macedonia recovered to roughly 0.77, while Albania and Kosovo remained lower and more volatile at around 0.70. The recovery followed the depletion of the exceptional hydro surplus that had temporarily pushed the Western Balkans into a net-export position. Once the region resumed importing, local prices again became more exposed to EU benchmarks.
The half-year comparison is less reassuring. During H1 2026, Italy averaged €125.5/MWh, Hungary €118.3/MWh and Romania €113.6/MWh, compared with Albania at €86.3/MWh, Kosovo at €88.2/MWh and Montenegro at €89.7/MWh. In the first half of 2025, Western Balkan and neighbouring EU prices had been broadly aligned. The year-on-year separation therefore widened even though the second quarter looked more convergent than the first.
This distinction matters for generators, traders and lenders. A temporary narrowing created by falling EU prices does not provide the same investment signal as durable market coupling. Renewable projects seeking exposure to Hungarian or Italian prices still face uncertainty over whether those benchmarks can be accessed after capacity costs, balancing charges and CBAM compliance requirements.
Serbia’s near convergence with Bulgaria is commercially important because it reduces the direct arbitrage value of that border. By contrast, the remaining Hungarian and Italian premiums continue to assign value to northern and western corridors, although national default emission factors can absorb most or all of the visible spread for carbon-intensive exports.
Q2 therefore did not reverse the emerging separation between EU and non-EU power markets. It temporarily compressed it. Regional prices moved together again because hydrology normalised and the Western Balkans became a price-taking importer, while the underlying institutional divide created by CBAM, verification rules and incomplete market coupling remained in place.
