South-East Europe is entering a structurally different phase of power system operation. Renewable capacity additions are accelerating across the Western Balkans and adjacent EU member states, while legacy flexibility resources are becoming increasingly constrained by hydrology, fuel costs, and regulatory pressure. In this context, long-duration energy storage is emerging not as an optional technology layer, but as a system-level stabiliser with direct implications for flexibility, grid security, and the economic viability of renewable expansion.
Installed wind and solar capacity across South-East Europe exceeded 34 GW by the end of 2025, with more than 11 GW added in the last four years alone. Serbia, Romania, Greece, Croatia, and Bulgaria account for the bulk of this capacity, but Bosnia and Herzegovina, North Macedonia, and Montenegro are now entering a phase of utility-scale solar and wind deployment that materially changes their system dynamics. By 2030, regional variable renewable penetration is projected to exceed 45 % of annual electricity generation, compared with less than 25 % a decade earlier.
This shift exposes a structural weakness in South-East European power systems. Flexibility resources remain dominated by conventional hydropower and thermal generation. Hydropower, while significant in Serbia, Bosnia and Herzegovina, and Montenegro, is increasingly seasonal and hydrologically volatile. Thermal fleets are ageing, carbon-intensive, and exposed to rising fuel and emissions costs. Short-duration batteries, now being deployed alongside solar parks, provide intraday balancing but are fundamentally incapable of covering multi-day renewable shortfalls. Long-duration energy storage fills precisely this gap.
Long-duration storage, defined as systems capable of delivering electricity over 8 to 72 hours or longer, directly addresses the most destabilising events in South-East European grids: extended low-wind periods in winter, prolonged summer heatwaves with weak wind output, and multi-day solar deficits caused by weather systems moving across the Balkans. System modelling for the region indicates that by 2030, South-East Europe will experience 5–10 multi-day low-renewable events per year in which variable renewable output falls below 20 % of installed capacity for more than 48 hours. Without long-duration storage, these events are currently covered by lignite, gas imports, or emergency cross-border balancing, all of which carry increasing economic and political risk.
From a flexibility perspective, long-duration storage fundamentally changes dispatch economics. A single 1 GW / 24 GWh long-duration storage asset can replace the firm capacity contribution of roughly 1.3–1.6 GW of open-cycle gas turbines when evaluated on a loss-of-load probability basis under South-East European load profiles. At the system level, deploying 10–15 GWh of long-duration storage per country would allow most Western Balkan systems to cover their critical multi-day deficits without resorting to emergency fossil dispatch, reducing peak-period imports by 20–35 %.
Grid stability is where the impact becomes even more pronounced. South-East European transmission systems operate with lower inertia margins than their Western European counterparts, particularly during high renewable output periods when synchronous thermal units are offline. Frequency deviations, voltage excursions, and ramp-rate stress already impose measurable costs on transmission system operators through redispatch and reserve activation. Long-duration storage, when configured for grid services, provides sustained frequency containment and ramping capability over many hours, not minutes. Studies of mixed renewable-storage systems in comparable grids show that each gigawatt of long-duration storage can reduce annual balancing energy costs by €35–55 million, largely by dampening prolonged imbalance periods rather than short spikes.
Renewables integration is where the economic case consolidates. Curtailment rates for utility-scale solar in parts of South-East Europe already reach 6–10 % during spring and early summer, driven by midday oversupply and constrained export capacity. Wind curtailment in coastal and mountainous zones is lower on an annual basis but spikes during prolonged high-wind episodes followed by grid congestion. Long-duration storage absorbs surplus generation over extended windows, not just daily peaks. Modelling indicates that adding 1 MWh of long-duration storage per 1.5–2 MW of solar capacity can reduce curtailment by more than 60 %, lifting effective solar capacity factors by 2–4 percentage points. For wind, the uplift is smaller but still material, particularly in systems with limited export capability.
The cross-border dimension amplifies these effects. South-East Europe remains only partially market-coupled, and interconnector utilisation is frequently constrained during stress events. Long-duration storage deployed in one jurisdiction reduces peak exports and imports during critical hours, easing congestion on shared corridors. Regional simulations suggest that coordinated deployment of 40–50 GWh of long-duration storage across South-East Europe could reduce cross-border emergency flows by 25–30 %, improving overall system resilience while lowering redispatch costs across multiple transmission zones.
Industrial demand adds another layer of relevance. Energy-intensive industries in Serbia, Romania, and Bulgaria face increasing exposure to volatile power prices and carbon-related compliance costs. Long-duration storage enables industrial consumers to shift demand toward stored low-cost renewable electricity during extended deficit periods. For large industrial sites consuming 200–400 GWh per year, access to behind-the-meter or contracted long-duration storage can reduce annual electricity procurement costs by 8–12 %, while simultaneously improving carbon intensity metrics that are becoming critical under EU trade and financing frameworks.
System adequacy considerations further strengthen the case. Several Western Balkan systems operate with effective reserve margins below 15 % during peak periods, leaving little tolerance for outages or renewable underperformance. Long-duration storage contributes firm capacity that is available precisely when short-duration batteries and demand response saturate. A portfolio of 5–7 GW of long-duration storage across the region by 2035 would allow retirement or reduced operation of at least 3–4 GW of the least efficient thermal capacity without compromising reliability, while cutting annual power-sector emissions by an estimated 6–9 million tonnes of CO₂.
The principal barriers are not technical but structural. Long-duration storage remains largely invisible in national adequacy assessments, capacity remuneration mechanisms, and grid planning processes across South-East Europe. Revenue streams are fragmented, duration value is not monetised, and permitting frameworks often treat storage as an ancillary add-on rather than core infrastructure. As a result, private capital prices long-duration storage as high-risk, despite its clear system value.
Quantitatively, closing the flexibility gap in South-East Europe will require cumulative investment of €18–25 billion in long-duration storage by 2040, depending on technology mix and deployment pace. This investment is comparable to the cost of maintaining ageing thermal fleets over the same period, but delivers fundamentally different system outcomes: lower emissions, higher renewable utilisation, and materially improved security of supply.
Long-duration energy storage therefore represents a decisive inflection point for South-East Europe’s power systems. It converts renewable capacity from a volatility driver into a controllable resource, transforms grid stability from a constraint into a service, and redefines adequacy planning around energy, not just capacity. As renewable penetration rises and legacy flexibility erodes, the region’s ability to deploy long-duration storage at scale will increasingly determine whether the energy transition remains manageable or becomes structurally destabilising.
By virtu.energy
