The renewable energy landscape across South-East Europe is evolving rapidly, with significant implications for investment and operational strategies in the sector. The combined installed capacity of solar and wind energy in Romania, Bulgaria, Greece, and Serbia is projected to surpass 15–20 GW by 2030. This growth is predominantly driven by solar energy, which is expected to account for approximately 60–65% of new installations due to its lower capital expenditure (CAPEX) and expedited permitting processes.
Current market dynamics reveal a structural divergence between solar and wind technologies in terms of operational behavior and financial viability. Solar projects are being developed at costs ranging from €0.6–0.9 million per MW, while onshore wind projects see costs between €1.2–1.6 million per MW. Despite the cost advantage of solar, its revenue generation faces constraints due to the temporal concentration of output, primarily during midday hours when prices tend to decline.
In Greece, for instance, midday electricity prices during peak solar generation can drop to €30–50/MWh, with instances approaching zero pricing during extreme conditions. Similar pricing pressures are observed in Bulgaria and Romania, particularly in areas with significant solar capacity installations such as southern Bulgaria and Dobrogea.
The concentration of solar generation leads to capture price discounts that can reduce revenues significantly. While average baseload market prices hover around €80–100/MWh, solar capture prices can fall to between €60–75/MWh, resulting in discounts that vary by location and penetration levels—sometimes exceeding €30/MWh in saturated nodes.
Curtailment further complicates the situation for solar projects. Grid limitations force operators to restrict output during peak production times, with curtailment rates commonly reaching 10–20%, and extreme cases hitting 25–30%. For a typical 100 MW solar plant, this could mean annual losses of 15–40 GWh, translating into foregone revenues between €1.0–3.0 million.
In contrast, wind energy exhibits a more favorable operational profile with capacity factors ranging from 30–45%, compared to only 15–22% for solar. Wind generation aligns better with demand patterns throughout the day, thus avoiding the oversupply issues that plague solar pricing. Consequently, wind capture prices tend to be higher—often between €75–95/MWh, compared to solar—and exhibit lower curtailment rates of about 3–8%, which can increase to 10–15% in more constrained areas.
The financial implications of these differences are stark. A typical 100 MW solar project, with a CAPEX estimated at €70–80 million, may yield annual revenues of only €8–12 million. After accounting for operating costs between €1.0–1.5 million per year, EBITDA would range from €7–10 million. In contrast, a similar-sized wind project costing around €130–150 million can generate annual revenues between €18–25 million, leading to an EBITDA of approximately €15–21 million.
Lenders are increasingly differentiating project financing based on these profiles. Solar projects located in constrained regions often face tighter debt sizing limits—typically capped at around 50–60%. In comparison, wind projects can support leverage ratios of up to 65-75%.
The rise of hybrid systems that integrate battery storage presents a potential solution for mitigating some challenges faced by solar projects. Co-locating battery storage allows for shifting energy generation from low-value midday periods to higher-value evening peaks, potentially increasing effective capture prices by up to €10-20/MWh .
The market structures in countries like Greece offer substantial arbitrage opportunities for storage integration due to wide intraday spreads reaching up to €60-100/MWh . Meanwhile, Romania and Bulgaria maintain spreads around €30-70/MWh that still justify investments despite varying returns based on operational efficiency.
The interaction between technology types and grid locations remains crucial; regions like Vojvodina (Serbia) benefit from stronger interconnections that reduce curtailment risks while improving economic prospects for solar installations. Conversely, southern regions such as Greece maintain a structural advantage for wind due to its ability to generate power without facing midday oversupply issues.
The anticipated investments in grid development—estimated at between €300-500 million per corridor —aimed at enhancing transmission capacity could help alleviate some existing constraints but may not fully offset the rapid growth of new solar installations.
This evolving landscape necessitates a strategic approach from investors who must now consider not just CAPEX or resource availability but also factors like capture profiles and curtailment risks when evaluating project viability. As renewable expansion continues across South-East Europe, the distinct economic niches occupied by wind and solar will likely persist, shaping future investment decisions within this differentiated market environment.
