By 2030, the electricity systems of the Western Balkans will no longer be marginal appendices to the European power market. They will sit at the centre of South-East Europe’s flexibility challenge, acting simultaneously as swing suppliers, congestion amplifiers, and recipients of structural price volatility. The modelling undertaken by Agora Energiewende, together with the REKK Foundation, makes this clear: the region’s future stability will not be determined by headline capacity additions, but by the interaction between ageing baseload assets, climate-exposed hydropower, variable renewables, and the depth of cross-border integration.
The Western Balkans enter the 2030 horizon with a power system inherited from a different era. Serbia, Bosnia and Herzegovina, Kosovo*, and parts of North Macedonia remain heavily dependent on lignite-fired generation built decades ago for baseload operation, while Albania and Montenegro rely disproportionately on hydropower for both energy and balancing. This legacy architecture delivered adequacy under a regime of predictable demand and stable hydrology. Under a system dominated by variable renewables and climate volatility, it becomes a source of structural fragility.
Agora’s modelling does not assume a dramatic collapse of existing thermal capacity by 2030. Instead, it shows lignite and coal plants continuing to operate, but in a fundamentally altered role. Utilisation rates decline materially, not because capacity disappears, but because merit-order displacement from wind and solar across Romania, Bulgaria, and Greece suppresses run hours during daylight and high-renewable periods. These plants increasingly re-enter dispatch during evening ramps, winter cold spells, and prolonged low-renewable events. The result is a paradoxical system in which thermal assets are simultaneously uneconomic in energy terms and indispensable in adequacy terms.
Serbia emerges as the pivotal node in this configuration. It is the largest load centre in the Western Balkans and a major transit system between Central Europe, Romania, and the southern Balkans. By 2030, Serbian lignite remains essential for regional security of supply during stress hours, yet its economic viability is increasingly undermined by carbon exposure and declining capacity factors. Agora’s dispatch simulations show that Serbia’s power system increasingly oscillates between export and scarcity within the same day, driven by solar-heavy midday surpluses and evening deficits. This intraday volatility is not an anomaly; it becomes a defining operational characteristic.
Hydropower, often presented as the Western Balkans’ natural advantage, is treated far more cautiously in the Agora analysis than in political narratives. While annual hydro generation remains broadly stable in energy terms, its temporal reliability deteriorates. Climate-driven variability increases the frequency of dry spells and reduces predictability at precisely the moments when flexibility is most valuable. Albania and Montenegro, whose systems are dominated by hydro, experience amplified exposure to hydrological risk, while Bosnia and Herzegovina’s mixed hydro-thermal profile offers partial buffering but not immunity.
Crucially, the study rejects the assumption that the Western Balkans can function indefinitely as a net flexibility exporter to the rest of South-East Europe. In high-hydro years, surplus exports remain possible, but during coincident drought and heat conditions, the region itself becomes structurally short. Under those conditions, cross-border dependence reverses, and the Western Balkans draw heavily on imports from Romania, Hungary, Bulgaria, and Greece. This bidirectional dependency lies at the heart of the region’s future price dynamics.
Wind and solar deployment accelerate markedly across the Western Balkans in the 2030 scenario, but with uneven geography and limited diversification. Serbia and Bosnia and Herzegovina account for the bulk of wind additions, while solar expands more evenly across North Macedonia, Albania, and Kosovo*. However, the modelling shows that wind output in the region exhibits higher short-term volatility than in Central or Western Europe, reflecting more concentrated wind regimes and less geographic smoothing. Hour-to-hour swings are materially larger than the EU average, reinforcing the need for regional balancing rather than national self-sufficiency.
Solar generation introduces a different, but equally structural challenge. High midday output suppresses prices and displaces thermal generation, while the evening ramp creates acute scarcity precisely when solar output collapses and demand remains elevated. Agora’s simulations show that without large-scale storage or demand-side flexibility, this pattern produces recurring evening stress across the entire South-East European system. The Western Balkans are not insulated from this dynamic; they are embedded within it.
Gas-fired generation plays a more significant role in the 2030 outlook than public discourse often acknowledges. Although gas does not dominate the energy mix, combined-cycle and open-cycle units become the primary fast-ramping resources during solar drop-off periods and wind lulls. Utilisation factors rise sharply compared with the early 2020s baseline, particularly in Serbia and North Macedonia. Agora’s modelling implicitly challenges the notion that the Western Balkans can bypass gas entirely without replacing its flexibility function through storage or advanced demand response.
Yet storage and demand-side response remain underdeveloped in the 2030 scenario, not because they lack system value, but because policy, market design, and investment frameworks lag behind technical need. As a result, hydro and cross-border trade shoulder most balancing responsibilities. This concentration of flexibility heightens systemic risk during coincident stress events, precisely the type of conditions that drove extreme price outcomes in the mid-2020s.
Network constraints amplify these challenges. The Western Balkans are embedded in critical north–south and east–west flow corridors, including Serbia–Romania, Serbia–Hungary, Bosnia and Herzegovina–Croatia, and Albania–Greece. Agora’s modelling shows these interfaces binding repeatedly under stress conditions, isolating local markets despite surplus capacity elsewhere. In such hours, scarcity pricing emerges not because energy is unavailable at the regional level, but because it is not deliverable where and when it is needed.
This distinction between installed capacity and deliverable capacity is one of the study’s most important contributions. Headline reserve margins across South-East Europe appear comfortable in aggregate by 2030. However, the location, flexibility, and network accessibility of that capacity matter far more than megawatt totals. For the Western Balkans, adequacy risk increasingly manifests as price spikes, congestion, and forced redispatch rather than outright blackouts. The system remains technically supplied, but economically stressed.
The broader implication is that volatility becomes structural rather than exceptional. As renewable penetration rises, the Western Balkans oscillate between periods of surplus and scarcity, with prices reflecting not fuel costs but system tightness. Market coupling transmits these signals efficiently across borders, spreading both relief and stress. Integration does not eliminate volatility; it reshapes it. The region’s exposure to extreme prices is therefore not a market failure, but a system design outcome.
Agora’s analysis ultimately frames the Western Balkans as a hinge region in the South-East European transition. Its hydro assets, thermal legacy, and geographic position give it outsized influence on regional balancing, yet also expose it to disproportionate risk if flexibility and network investments lag. The 2030 system functions securely only under conditions of deep integration, sufficient dispatchable capacity, and materially improved cross-border deliverability.
Absent these conditions, the Western Balkans face a future in which electricity prices increasingly reflect scarcity premiums rather than production costs, reshaping industrial competitiveness, investment decisions, and social policy across the region. The study does not predict crisis; it describes a system that demands structural adaptation. Whether that adaptation occurs through coordinated investment or through repeated stress events remains the central unanswered question embedded in the 2030 outlook.
