Southeast Europe remains vulnerable to electricity-price spikes because renewable investment is advancing faster than cross-border grids, operational coordination and flexible capacity, according to an ACER assessment reinforced by market developments during the summer of 2026.
The EU energy regulator concluded that the region’s 2024 price spikes were not an isolated event but evidence of structural weaknesses. It recommended 10 measures centred on transmission investment, improved outage coordination, storage, demand response, flow-based market coupling and compliance with the EU requirement to make at least 70% of transmission capacity available for cross-border trade.
Developments since the report was published in May have strengthened that assessment.
Severe drought and low river levels reduced nuclear, hydro and thermal availability across Romania, Hungary, Slovenia and neighbouring markets during July and August. At the same time, air-conditioning demand increased and solar output fell rapidly in the evening, leaving several countries seeking imports during the same hours.
Romania’s Cernavodă nuclear plant lost both of its approximately 706 MW units at the height of the drought, removing capacity that normally supplies close to one fifth of national electricity. Hungary’s 2,000 MW Paks plant was also heavily constrained as authorities intervened to maintain sufficient Danube water for cooling.
Hydro production weakened across parts of the region, while thermal plants faced cooling and fuel-related constraints. Montenegro shortened an overhaul at the 307 MW Perućica hydropower plant to return 190 MW to service because its system was under pressure and the 225 MW Pljevlja thermal plant was unavailable.
These events turned interconnectors into the region’s principal insurance mechanism. But an interconnector can support neighbouring markets only to the extent that physical capacity is available and national operators release that capacity for trade.
ACER’s 70% requirement is therefore central. Holding excessive transmission capacity for domestic congestion management restricts trade and can amplify price differences between neighbouring bidding zones. Making more capacity available would allow cheaper generation to displace expensive plants across a wider area.
The difficulty is that transmission operators cannot safely release capacity that the network cannot carry. Compliance must therefore be combined with grid reinforcement, better regional network models and more effective remedial actions.
Planned outages remain a market risk
ACER identified weak coordination of planned grid outages as one cause of avoidable capacity reductions. This is particularly important in Southeast Europe, where maintenance on one line can redirect flows through several neighbouring systems.
Recent partial decoupling and delayed market-coupling results on regional power exchanges show that the institutional architecture also remains vulnerable. Even short disruptions can reduce liquidity, separate bidding zones and force traders to manage exposure through more expensive intraday or balancing transactions.
The region’s meshed grid further complicates congestion management. Electricity scheduled on one border may physically flow across several others. Energy Community data for the first quarter showed large discrepancies between commercial schedules and physical flows on corridors running from Greece and Albania through Montenegro and Bosnia towards Croatia, Hungary and Romania.
That divergence increases redispatch requirements and makes available capacity more difficult to calculate. It also raises the operational importance of coordinated remedial actions rather than uncoordinated national restrictions.
ACER recommends wider use of flow-based capacity calculation, which models how transactions affect the entire interconnected grid instead of treating each border separately. The approach is already used in parts of the EU but remains incomplete across Southeast Europe and does not yet fully include the Western Balkans.
Storage is rising, but market access still lags
New storage capacity can reduce solar-driven volatility by charging during low-price daylight hours and discharging during the evening peak. Bulgaria and Greece have moved quickly to support battery investment, while Romania and Serbia have substantial pipelines.
Serbia has identified 724 MW of prospective battery capacity through transmission-related planning and an additional 200 MW/400 MWh within the EPS investment programme. But planned capacity cannot support the system until it is connected, prequalified and allowed to participate in energy and balancing markets.
Regulatory barriers remain material. Some storage projects face double network charging, unclear connection treatment or limited access to reserve products. Demand response and aggregation are also at an early stage in much of the region.
This means Southeast Europe may add several gigawatts of renewable and storage projects while still relying on older hydro and thermal plants for most operational flexibility.
Forecast: tighter evenings, wider weather-driven spreads
Regional wholesale markets are likely to remain volatile through autumn 2026. Cooler weather should reduce air-conditioning demand, but several risks are carrying over from summer.
Low hydro reserves may limit the ability of utilities to generate aggressively during high-price periods. Nuclear availability in Hungary and Romania will remain closely watched, while planned thermal and grid maintenance could remove additional capacity.
Gas prices are another upward risk. Higher European gas costs raise the marginal cost of generation in Greece, Italy and Romania and can lift electricity prices across the connected region. This effect is strongest during evening hours when solar generation falls and gas plants increasingly set the clearing price.
The most likely autumn pattern is therefore not continuous scarcity but repeated episodes of sharp hourly divergence: lower prices during renewable-rich periods, followed by expensive evening ramps and wider spreads where border capacity is constrained.
Bulgaria could retain a relative advantage when nuclear, coal and battery availability is strong. Romania and Hungary remain more exposed to nuclear recovery, Danube conditions and imports. Serbia and Montenegro will depend on hydro availability and the performance of their thermal fleets, while Greece will continue to transmit gas-price exposure northward during low-renewable hours.
ACER’s recommendations will not remove those risks before winter. Grid reinforcement and flow-based integration take years. For the coming months, the decisive variables will be outage coordination, real-time border capacity and whether available batteries and flexible plants can respond when several countries need them at once.
The region does not lack interconnection. Its vulnerability lies in how little usable flexibility may remain on the most difficult evening.
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