The Serbian electricity market has shown notable momentum as it entered 2025, marked by a significant increase in forward trading volumes and a broader institutional participation landscape. Futures contracts have become an integral component of hedging strategies among local utilities and traders. However, this growth has not yet reached the critical mass necessary for SEEPEX futures to independently manage Serbia’s power risk.
During 2025, futures traded for delivery year reached approximately 2.26 TWh, which is more than 2.5 times the volume from the previous year. This surge indicates a shift in behavior among Serbian market participants, who are increasingly opting for exchange-cleared forwards instead of relying solely on bilateral contracts.
Despite this progress, the scale of trading remains an issue. Serbia’s total electricity consumption far exceeds the volume traded on SEEPEX, meaning that even with growth, these futures only cover a minor share of underlying physical exposure. Furthermore, liquidity across various products is unevenly distributed.
In 2025, annual baseload contracts dominated trading activity, emerging as the primary hedging instrument. Quarterly contracts saw sporadic trading activity, often concentrated around specific calendar periods, while monthly products remained thinly traded. This arrangement enables participants to secure headline price levels but limits opportunities for active portfolio management.
For those looking to hedge annual positions, SEEPEX provided adequate execution for trades up to 10–20 MW clips. However, larger trades began to reveal market impact issues, compelling participants to either slow their execution rates or seek additional external hedges. Adjusting established positions also became challenging due to slippage risks outside peak liquidity periods.
This scenario led many participants to adopt SEEPEX futures as an anchor hedge, using them to cover part of their exposure locally while turning to HUPX or German-linked futures for complete coverage. This layered approach mitigated outright price risk but introduced complexities related to basis exposure and execution challenges.
The volatility driven by congestion issues also remained unresolved in 2025. Serbian electricity prices continued to be sensitive to cross-border flows towards Hungary and Romania. Since forward markets do not address transmission risks directly, SEEPEX futures included implicit congestion premiums that varied over time, complicating the hedging process for market participants.
From an institutional standpoint, advancements in SEEPEX’s operations have been significant. Improvements in clearing arrangements have bolstered counterparty confidence and increased transparency in reporting while expanding participation beyond a narrow base of utilities. These developments are essential for fostering deeper market engagement in the future.
However, as 2025 concluded, it became clear that SEEPEX futures represented progress without autonomy. While they reduced reliance on bilateral contracts and enhanced price transparency, they did not eliminate dependence on external hedge venues entirely. For larger portfolios exceeding 30–40 MW, reliance solely on SEEPEX proved insufficient.
The Serbian power market thus finds itself at a pivotal stage—no longer in its infancy but still not fully self-sufficient. Although a forward curve exists, it lacks the density necessary to internalize national power risks effectively. Until there is a substantial increase in open interest across various tenors and a marked improvement in execution capacity, SEEPEX futures will remain a supporting pillar, rather than serving as a standalone foundation for hedging activities.
