The western edge of the Balkan electricity system enters December 2025 with a familiar imbalance: structurally small power exchanges, modest liquidity, highly weather-sensitive production, and an almost total dependence on neighbouring hubs for price formation. Montenegro, Croatia and Albania sit outside the gravitational core created by HUPX, OPCOM, SEEPEX and IBEX, yet their winter price signals have become increasingly relevant for understanding South-East Europe’s energy stability. December’s early trading confirms how deeply interconnected they have become — and how their local fundamentals still ripple across borders when the system tightens.
Croatia remains the region’s most mature market after Slovenia and Hungary, thanks to HROTE’s established ecosystem and the country’s long-standing integration with Central European flows. Even so, Croatia’s day-ahead pricing in late 2025 does not operate independently of its neighbours. December opens with clear signs of convergence: Croatian base-load prices track between 120 and 140 euros per megawatt-hour, almost entirely aligned with the Hungarian and Slovenian nodes. This alignment is no accident. Croatia’s generation mix — gas, hydro, imports and a slowly expanding renewable base — means that its marginal pricing still depends on flows from the north. When weather is mild and the Alpine hydro corridor is strong, Croatia benefits directly. When temperatures fall and CCGTs in Central Europe set the price, Croatia follows. As a result, its December 2025 price evolution is less volatile than Serbia’s and less structurally elevated than Bulgaria’s, though still capable of sudden overnight swings driven by wind variability along the Adriatic.
Albania stands at the other end of the spectrum. It is perhaps the most hydro-dependent electricity system in Europe, a status that gives its price curve a rhythm entirely dictated by rainfall. In wet years, Albania becomes a notable exporter; in dry winters, it is forced into expensive regional imports at exactly the moment its neighbours are also constrained. December 2025 showcases both sides of this dependency. Heavy rainfall in November brought reservoirs to comfortable levels, easing pressure on imports during the first days of December. But even this favourable hydrology could not fully shelter Albania from broader regional dynamics: when Serbia experienced tightness in early December and SEEPEX spiked toward 150–170 euros, import prices into Albania rose immediately. The smaller and shallower the exchange, the more brutally it reflects the wholesale conditions of its larger neighbours. Albanian market participants have long argued for deeper integration with the European market coupling framework, but this process has only partially materialised, limiting Albania’s ability to smooth out the price volatility that peaks every winter.
Montenegro sits in between these two extremes: too small to be a true price setter, but too strategically placed to behave like a dependent periphery. December 2025 reveals its dual character. On one hand, Montenegro’s price levels remain tightly bound to Serbia and the Croatian-Slovenian corridor, with early-December clearing prices hovering around 115–135 euros per megawatt-hour. On the other hand, its system is acutely sensitive to outages or yield fluctuations at the Pljevlja thermal plant and the country’s hydro plants, especially during moments when the region experiences parallel stress events. When SEEPEX spiked above 150 euros in the first week of December, Montenegrin buyers faced the same imported price curve almost instantly; when wind conditions improved along the Adriatic and Croatian prices softened again, Montenegro’s effective supply cost fell in tandem. The absence of a fully structured national power exchange leaves Montenegro reliant on bilateral trades and regional reference nodes, which reflect both the benefits and vulnerabilities of its geographical position.
What unites these three markets in December 2025 is not their size, structure or liquidity profile, but the way they are now pulled into the regional merit order. In the early 2010s, price formation in the western Balkans could still be described through domestic fundamentals and bilateral contracts. A hydro-rich Albania might show one curve, a coal-dependent Montenegro another, and Croatia — with its gas-fired generation — a third. The December 2025 landscape is a different universe. Croatia prices almost exactly in line with the HUPX-Slovenia-Italy coupling triangle. Montenegro mirrors Serbia with only modest deviations, reflecting its grid connection structure and its dependence on SEEPEX as a reference market. Albania swings more sharply but still anchors its import pricing to the same regional signal. The result is a three-tier market: Croatia as the closest outer ring to the EU core, Montenegro as the balancing point between EU-coupled and non-coupled zones, and Albania as the hydrology-driven outlier whose volatility still resonates across the periphery.
Forecasting the first quarter of 2026 for these smaller exchanges requires attention to fundamentals rather than historical averages. Croatia’s outlook is the most straightforward. With gas prices hovering at multi-month lows and the broader region trading in a narrow 115–135 euro corridor, Croatian baseload for January through March is likely to remain aligned with Slovenia and Hungary, drifting only when local wind or hydro deviates strongly from seasonal norms. As long as TTF stays in the 25–35 euro range, Croatia’s thermal fleet will not set significantly higher marginal prices, and HROTE participants can expect a winter shaped more by cross-border flows than by domestic stress.
Montenegro’s Q1 2026 trajectory is more fragile, anchored as it is to the health of a single major thermal plant and hydro conditions that can swing quickly. If December’s reservoir levels hold and regional demand does not surge unexpectedly, Montenegrin wholesale prices should stay within the same band as SEEPEX. But in a cold-winter scenario — especially one that pressures Serbia’s lignite fleet — Montenegro could face a steeper upward trajectory, with imported power clearing at 150–170 euros on tight days. Its position between EU-integrated Croatia and non-EU Serbia makes it uniquely exposed to both sides of the regional system, creating a price curve more sensitive to shocks than its geographical size would suggest.
Albania’s Q1 outlook carries the most uncertainty. If winter precipitation continues and water levels remain high, Albania will benefit from lower import requirements and may even modestly export during certain hours. In such a mild or hydrologically favourable scenario, Albania’s effective wholesale cost could align with the lower edge of the regional band, around 100–120 euros. But any prolonged dry spell in January or February would immediately expose the system to regional supply tightness, and in those periods Albania can face the worst prices in the region. The country remains structurally vulnerable to cold-winter volatility. A single week of reduced rainfall can push import prices into the 150–180 euro range, even when neighbouring countries remain relatively stable. Hydrology will therefore determine not only Albania’s domestic supply balance but the extent of its integration into the regional pricing rhythm.
Despite their differences, December 2025 reveals an important truth about Montenegro, Croatia and Albania: their market futures are no longer shaped primarily by national generation assets or legacy structures, but by the regional architecture that now defines the Balkan electricity landscape. The spread between these smaller markets and their larger neighbours has narrowed, not because they have grown, but because the region has integrated. In this sense, December’s price signals are less a snapshot of winter conditions and more a preview of long-term evolution. As Q1 2026 approaches, all three countries face a market governed by gas prices, weather patterns and the growing power of Europe’s coupled market — not by the limits of their own domestic systems.
If the winter remains normal and gas prices remain soft, the smaller Balkan nodes will enjoy one of their most stable Q1 periods in years, trading at levels once unimaginable during the crisis years. If winter tightens, their vulnerability will reappear quickly, but even then, the region will move together. The story of December 2025 is that small markets no longer move alone. The story of Q1 2026 will be whether they can continue moving with the same rhythm — or whether hydrology, weather and structural fragility will once again show that size still matters at the edges of Europe’s power map.
