Electricity trading in the Western Balkans developed in two opposite directions during the second quarter of 2026. Commercial exchange with the European Union declined sharply, while activity on regional day-ahead exchanges expanded across every market.
Gross scheduled electricity exchange across Western Balkan–EU borders fell by approximately 15% year on year, from 8,828 GWh to 7,494 GWh. The decline followed a 23% contraction in the first quarter, leaving total exchange during the first half of 2026 around 19% below H1 2025, at 15,567 GWh compared with 19,323 GWh.
The region returned to its usual net-import position as hydrology weakened. Imports from the EU reached 4,271 GWh, down 14%, while exports fell 16% to 3,223 GWh. The resulting net import balance of approximately 1,048 GWh was close to the level recorded in Q2 2025. The trade balance normalised, but the volume of electricity moving commercially across the border did not.
Transmission capacity cannot fully explain the fall. Allocation rates remained close to 100% on the principal export corridors whenever capacity was offered. The market purchased the rights but scheduled less energy. That suggests that the declining cross-border volume reflected commercial caution, uncertain carbon economics and changing route preferences rather than a simple lack of interconnection access.
Regional power exchanges told a different story. Combined day-ahead volumes rose 19% to 2.70 TWh, from 2.26 TWha year earlier. ALPEX, covering Albania and Kosovo, recorded the strongest increase at 52%. Montenegro’s MEPX rose 49%, North Macedonia’s MEMO increased 31%, and Serbia’s SEEPEX returned to growth with a 7% rise.
SEEPEX’s recovery is particularly relevant because it had been the only exchange to contract in the first quarter. Its earlier decline was associated with greater exposure to transit-based trading. The Q2 rebound coincided with more stable EU ETS prices, narrower directional spreads and the strengthening of Serbia’s role as a route towards Hungary.
The divergence between domestic liquidity and external trade points towards a new stage in regional market development. Local exchanges are becoming more useful for portfolio management, balancing and short-term price discovery. However, the commercial link connecting those markets to EU benchmarks is carrying less volume.
That is a concern for integration. Greater domestic liquidity is positive, but it cannot replace market coupling, predictable cross-border pricing and access to higher-value EU demand. A liquid local exchange operating behind a carbon and regulatory barrier may improve internal trading without delivering the revenue convergence expected by renewable investors.
CBAM is one possible contributor to the decline, but the Energy Community Secretariat does not isolate it as the sole cause. Hydrology, lower EU prices, generation availability and regulatory uncertainty also shaped the quarter. The persistence of a double-digit decline despite normalised trade balances and narrowing spreads nevertheless makes the cross-border contraction commercially significant.
The regional market is not becoming less active. It is becoming more internally active and externally segmented. That structure favours traders with strong local portfolios and balancing capabilities, while increasing the value of compliant physical PPAs, verifiable renewable supply chains and access to the few cross-border routes that still support meaningful premiums.
