The electricity landscape in South-East Europe (SEE) is undergoing a significant transformation as the focus shifts from generation capacity to transmission infrastructure. This transition is particularly evident across Serbia, Bosnia and Herzegovina, Montenegro, Albania, and North Macedonia, where a new wave of 400 kV interconnections and grid reinforcements is shaping a more integrated power system. This evolution is not merely an expansion of capacity; it represents a structural reconfiguration of how electricity flows throughout the region.
At the heart of this shift lies the Trans-Balkan electricity corridor, which is emerging as a multi-country infrastructure platform connecting Serbia, Montenegro, Bosnia and Herzegovina, and extending into European Union markets. New projects planned for 2025–2026 indicate that this corridor will play a crucial role in enhancing cross-border transfer capacity and facilitating larger electricity exchanges.
A key component of this development is the construction of a double 400 kV overhead line linking Pljevlja in Montenegro with Bajina Bašta in Serbia and Višegrad in Bosnia and Herzegovina. This project aims to complete the core Trans-Balkan loop, significantly increasing interconnectivity and enabling flows toward Italy via existing submarine cables. Concurrently, new interconnections such as Gacko–Brezna (Bosnia and Herzegovina–Montenegro) and Brezna–Sarajevo are being advanced to alleviate congestion while supporting renewable energy integration.
The Kosovo–North Macedonia 400 kV corridor is also gaining prominence as part of an east-west transmission axis that enhances connectivity with Albania. Albania’s substantial grid transformation includes new interconnections with Kosovo and Greece, alongside upgrades to existing substations like Fierza, positioning the country as a potential renewable energy export hub.
This expansion of the 400 kV network is closely linked to a parallel increase in renewable generation capacity. Notably, the proposed Moglice pumped-storage expansion in Albania aims to provide up to 1,620 MW of capacity with approximately 30 GWh of storage, allowing for balancing across national systems. Such large-scale storage solutions are critical as they address the variability associated with renewable generation.
The integration of renewables into transmission design is becoming increasingly explicit. In northeastern Albania, new 400 kV infrastructure plans aim to facilitate over 1 GW of wind capacity, relieving pressure on existing lower voltage lines. This trend reflects a broader shift where grid investments are now explicitly tied to identifiable renewable energy projects.
In Montenegro, partnerships such as that between EPCG and Masdar focus on developing large-scale solar and wind projects aimed at exporting green electricity through existing connections with Italy. This approach highlights how transmission capacity can be leveraged as an economic asset for renewable energy monetization.
Serbia remains a pivotal player within this evolving framework. Its internal grid enhancements—especially concerning the 400 kV network connecting major cities—are backed by investments estimated between EUR 200–300 million. These upgrades aim to reduce internal bottlenecks while improving transfer capabilities between northern and southern regions. New lines such as Kragujevac–Kraljevo and Obrenovac–Bajina Bašta are being constructed to replace aging infrastructure.
Despite advancements at higher voltage levels, legacy systems still pose challenges. The widely used 220 kV network, identified increasingly as a bottleneck, necessitates rehabilitation efforts like those on the Trebinje–Perućica–Podgorica–Vau Dejës corridor. At the lower voltage level (110 kV), congestion issues arise where most renewables connect, highlighting the need for targeted reinforcements to ensure effective distribution of electricity generated from decentralized sources.
This evolving landscape has led to what can be described as a three-speed grid: an expanding and integrating 400 kV system; a stabilizing 220 kV network undergoing selective rehabilitation; and an increasingly stressed 110 kV system grappling with decentralized generation pressures. These dynamics are reshaping market behavior across SEE.
The region’s electricity markets are starting to reflect these changes through increased trading volumes in well-connected corridors such as those between Serbia and Hungary or Romania. However, persistent congestion in less developed areas continues to create regional price divergences alongside arbitrage opportunities.
The introduction of negative pricing mechanisms coupled with expanded balancing markets further accelerates this transition. Granular price signals now better reflect physical constraints within the grid while rewarding flexibility through storage solutions and hybrid generation models near strong transmission nodes.
A look towards 2030–2035 indicates that SEE may not fully converge into a unified electricity market akin to Western Europe but will instead develop into a complex system characterized by high interconnectivity at the transmission level alongside local bottlenecks and uneven investment conditions.
A distinct investment geography is emerging: strong interconnections create stable conditions in the northern belt linking Hungary, Romania, and northern Serbia; ongoing reinforcement characterizes transitional central areas including parts of Bosnia; while southern regions like Albania face developmental challenges despite significant renewable potential.
This transformation signifies that transmission corridors are evolving into vital economic arteries for SEE’s energy landscape—defining capital flows, project locations, and pricing structures within the market. The value proposition for renewable projects increasingly hinges on their strategic positioning within this network rather than merely their installed capacities alone.
The current trajectory suggests that South-East Europe is transitioning from fragmented national systems towards a corridor-driven regional market where interlinked transmission infrastructure supports renewable generation alongside necessary storage capacities. The alignment pace among these elements will be crucial in determining whether SEE integrates fully into the European energy system or retains its status as a partially integrated frontier market marked by structural inefficiencies.
