Electricity trading in the Western Balkans moved in two opposite directions during the second quarter of 2026. Commercial electricity exchange with the European Union declined sharply, while activity on regional day-ahead power exchanges increased across all markets.
Gross scheduled electricity exchange across Western Balkan–EU borders fell by approximately 15% year on year, from 8,828 GWh to 7,494 GWh. This followed a 23% contraction in the first quarter, leaving total cross-border exchange during the first half of 2026 around 19% below H1 2025, at 15,567 GWh compared with 19,323 GWh a year earlier.
The region returned to its usual net-import position as hydrological conditions weakened. Imports from the EU reached 4,271 GWh, down 14%, while exports fell 16% to 3,223 GWh. This resulted in a net import balance of approximately 1,048 GWh, broadly in line with the level recorded in Q2 2025. The regional trade balance therefore normalised, but the amount of electricity being traded commercially across the EU border did not.
Transmission capacity alone cannot explain the decline. Allocation rates remained close to 100% on the main export corridors whenever capacity was offered. Market participants continued to purchase transmission rights, but scheduled less electricity across them. This suggests that lower cross-border volumes reflected commercial caution, uncertainty over carbon-related costs and changing route preferences, rather than a simple lack of available interconnection capacity.
Regional power exchanges showed a markedly different trend. Combined day-ahead trading volumes increased by 19% to 2.70 TWh, from 2.26 TWh a year earlier. ALPEX, covering Albania and Kosovo, recorded the strongest growth at 52%. Montenegro’s MEPX increased 49%, North Macedonia’s MEMO rose 31%, while Serbia’s SEEPEX returned to growth with a 7% increase.
SEEPEX’s recovery is particularly significant because it had been the only regional exchange to contract in the first quarter. Its earlier decline was associated with greater exposure to transit-based trading. The Q2 rebound coincided with more stable EU ETS prices, narrower directional price spreads and a strengthening role for Serbia as an electricity route towards Hungary.
The divergence between domestic market liquidity and external electricity trade points to a new stage in regional market development. Local exchanges are becoming increasingly useful for portfolio management, balancing and short-term price discovery. However, the commercial link connecting those markets with EU price benchmarks is carrying less electricity.
That trend raises concerns for regional market integration. Greater domestic liquidity is positive, but it cannot substitute for market coupling, predictable cross-border pricing and access to higher-value EU demand. A liquid local exchange operating behind carbon and regulatory barriers can improve internal trading without delivering the revenue convergence expected by renewable energy investors.
CBAM may be contributing to the decline in cross-border trading, although the Energy Community Secretariat does not identify it as the sole cause. Hydrological conditions, lower EU wholesale prices, generation availability and regulatory uncertainty also shaped the quarter. Nevertheless, the persistence of a double-digit decline despite a normalised trade balance and narrower price spreads makes the contraction in cross-border exchange commercially significant.
The regional electricity market is therefore not becoming less active. Instead, it is becoming more internally liquid and more externally segmented. This structure favours traders with strong local portfolios and balancing capabilities, while increasing the value of compliant physical PPAs, verifiable renewable supply chains and access to the limited number of cross-border routes that continue to support meaningful price premiums.
