During the second half of May, the Southeast European electricity market moved lower as stronger hydro conditions, faster solar output and improved wind generation offset higher gas and carbon prices. The shift was reflected across regional exchanges, with pricing increasingly influenced by renewable output rather than fuel costs, reports Electricity.Trade.
Demand and generation mix across the region
Average regional demand excluding Greece eased from 22,578 MW in the first half of May to 21,927 MW in the second half despite warmer weather. Over the same period, hydro generation rose to 6,580 MW, solar output reached 5,632 MW, and wind generation climbed to 2,833 MW. Coal and nuclear generation both declined while renewable technologies supplied the majority of electricity across Southeast Europe.
Exchange-level price corrections in Albania, Montenegro and North Macedonia
Albania recorded the largest price correction in the region. Average ALPEX prices fell from €98.60/MWh to €81.16/MWh, down more than 17%, as stronger hydrology supported lower-cost generation and reinforced export capability during wet periods.
Montenegro followed a similar pattern, with BELEN prices dropping from €98.76/MWh to €83.92/MWh. North Macedonia also saw downward pressure, with MEMO prices declining from €97.17/MWh to €82.66/MWh. The changes coincided with lower import costs, stronger regional renewable production and increased market integration.
Larger markets: Serbia, Bulgaria and Romania
Serbia’s SEEPEX averaged €91.95/MWh, down from €101.61/MWh. Prices fell by almost 10%, but Serbia remained more expensive than Albania, Montenegro and North Macedonia due to its central position in regional trading flows and balancing markets.
Bulgaria’s IBEX decreased from €104.98/MWh to €97.41/MWh. Romania’s OPCOM fell from €115.88/MWhto €103.64/MWh, leaving Romania among the highest-priced markets in Southeast Europe. Transmission constraints and Romania’s role as a regional balancing hub were cited as factors behind the relative price level.
Greece declines while Croatia and Slovenia hold up better
Greece continued moving lower as renewable penetration increased, with HENEX prices averaging €85.81/MWh, down from €92.36/MWh. The price trend reinforced concerns among solar investors about declining merchant revenues and increasingly frequent negative-price periods.
Croatia and Slovenia were comparatively resilient, with CROPEX averaging €101.52/MWh. Slovenia’s BSP averaged €101.15/MWh, reflecting tighter coupling with Central European pricing compared with southern Balkan exchanges.
Daylight versus evening price gap widens on solar output swings
The most notable structural change in May was the expansion of the price gap between daylight and evening hours. Solar generation continued suppressing midday prices as photovoltaic output displaced thermal units from the merit order during daylight periods.
After solar production faded in the evening, gas, hydro and flexible thermal units regained importance, supporting higher prices during peak consumption periods. This pattern increased relative value for assets able to shift energy across time rather than only produce volume.
[Battery storage], pumped hydro, flexible gas generation and dispatchable hydro facilities all gained relative value during May.
Cross-border flows shift toward Italy while commodities move higher
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[Net exports] improved during the second half of May as Southeast Europe exported more electricity toward Italy while reducing dependence on imports from Central Europe. Flows toward Italy shifted from a net import position in the first half of May to a net export position in the second half, demonstrating improving competitiveness of renewable generation across the Balkans.
The flow patterns also highlighted Romania’s role as a major exporter toward Hungary. Bulgaria maintained its position as a key balancing corridor linking Romania, Greece, Serbia and Turkey, while Serbia operated as a transit and trading hub at the intersection of flows from Romania, Bulgaria, Bosnia and Herzegovina and Hungary.
Austrian gas rises alongside higher carbon prices despite falling power values
[Commodity markets] moved in the opposite direction to power prices, reports Electricity.Trade . Average Austrian gas prices increased to €49.85/MWh, Greek gas prices rose to €46.09/MWh, and EU carbon allowances climbed to €77.18/t. Despite these moves that would typically support higher power pricing under traditional conditions, electricity prices declined sharply across Southeast Europe.
Hydrology effects and shifting investor focus on solar versus wind revenues
The May data pointed to changes for market participants as solar capacity expands across Romania, Bulgaria, Greece and increasingly parts of the Western Balkans. Standalone merchant solar projects faced growing revenue compression during daylight hours as midday pricing was suppressed by higher photovoltaic output.
Wind projects were described as better positioned because their production profiles align more closely with evening and nighttime demand peaks when prices remain stronger.
Toward three regional pricing zones for summer trading conditions
[Hydropower] continued to be decisive as improved hydrology during May strengthened export capability across Albania, Montenegro and parts of Bosnia and Herzegovina while reducing regional price levels. Weather conditions were identified as an important variable for traders heading into summer.
The market was increasingly described as separating into three zones: a renewable-discount zone comprising Albania, Montenegro, North Macedonia and increasingly Greece; a balancing and transit zone led by Serbia, Bulgaria and Romania; and a Central European convergence zone represented by Croatia, Slovenia and Hungary.
Status check: coal-and-gas-driven pricing no longer dominates (May 2026)
The May 2026 developments indicated that Southeast Europe is no longer primarily a coal-and-gas-driven power market. Price formation was described as increasingly determined by renewable production levels, interconnection availability, system flexibility and storage capacity. The reported outcome included lower average prices, wider intraday volatility and an increasing premium on flexible generation and trading strategies, reports Electricity.Trade .
