Day-ahead electricity prices across Southeast Europe moved closer together during the second quarter of 2026, but the apparent convergence was driven primarily by falling EU wholesale prices rather than a full restoration of cross-border market integration.
Italy’s average day-ahead price fell from €130.3/MWh in Q1 to €120.9/MWh in Q2, while Hungary declined from €127.5/MWh to €109.2/MWh. Romania dropped to €109.4/MWh, Croatia to €103.3/MWh and Bulgaria to €96.8/MWh. Western Balkan prices changed much less. Serbia averaged €96.3/MWh, Montenegro €93.6/MWh, North Macedonia €91.6/MWh, Kosovo €89.0/MWh and Albania €88.6/MWh. Greece remained closely aligned with the lower-priced Balkan markets at €90.2/MWh.
The adjustment significantly narrowed several cross-border price spreads. The average Montenegro–Italy differential fell to around €27.2/MWh, compared with approximately €44/MWh in Q1. Hungary remained about €12.9/MWh above Serbia, while Serbian and Bulgarian prices moved close to parity, with a difference of just €0.5/MWh. Albania and Greece were separated by only €1.6/MWh, while North Macedonia remained slightly more expensive than Greece.
Under normal market conditions, such a compression in price spreads would suggest a return towards greater market integration. The Q2 pattern, however, is more complex. EU benchmarks declined amid softer seasonal demand, lower gas-linked marginal costs and stronger spring solar and wind generation. Western Balkan prices were comparatively stable and, in several markets, increased. Montenegro recorded an increase of around €7.8/MWh, Albania rose by €4.7/MWh, while Serbia and Kosovo increased by approximately €1.6/MWh. Only North Macedonia recorded a material decline.
Price correlation with Hungary also recovered. Serbia reached approximately 0.91 by the end of June, while Montenegro climbed to around 0.82, levels close to those typically associated with interconnected markets. North Macedonia recovered to roughly 0.77, while Albania and Kosovo remained lower and more volatile, at around 0.70. The recovery followed the depletion of the exceptional hydro surplus that had temporarily pushed the Western Balkans into a net-export position. As the region returned to importing electricity, local prices once again became more closely exposed to EU benchmarks.
The first-half comparison is less encouraging. During H1 2026, Italy averaged €125.5/MWh, Hungary €118.3/MWh and Romania €113.6/MWh, compared with €86.3/MWh in Albania, €88.2/MWh in Kosovo and €89.7/MWh in Montenegro. In the first half of 2025, prices across the Western Balkans and neighbouring EU markets had been broadly aligned. The year-on-year divergence therefore widened, even though the second quarter appeared significantly more convergent than the first.
This distinction is important for generators, traders and lenders. A temporary narrowing of price spreads caused by falling EU benchmarks does not provide the same investment signal as durable market coupling. Renewable energy projects seeking exposure to Hungarian or Italian prices continue to face uncertainty over whether those benchmarks can be effectively accessed once cross-border capacity costs, balancing charges and CBAM compliance requirements are taken into account.
Serbia’s near-convergence with Bulgaria is commercially significant because it reduces the immediate arbitrage value of that border. By contrast, the remaining Hungarian and Italian price premiums continue to support the value of northern and western transmission corridors, although national default emission factors can absorb much or even all of the visible price spread for carbon-intensive electricity exports.
Q2 therefore did not reverse the emerging separation between EU and non-EU electricity markets. Instead, it temporarily compressed the gap. Regional prices moved closer together as hydrological conditions normalised and the Western Balkans returned to being price-taking importers, while the underlying institutional divide created by CBAM, verification requirements and incomplete market coupling remained firmly in place.
