Southeast Europe’s electricity markets demonstrated a high degree of physical integration during parts of August, with several national power exchanges clearing at remarkably similar prices.
At the same time, the EU’s Carbon Border Adjustment Mechanism is creating a new economic dividing line between EU and non-EU electricity markets.
On August 19, day-ahead prices in Hungary, Romania, Bulgaria, Slovenia and Croatia converged at around €168/MWh, with the difference between the markets narrowing to approximately €0.30/MWh.
A similar pattern emerged on August 25, when Hungary, Romania, Bulgaria, Greece, Croatia and Slovenia traded within a relatively narrow range of approximately €173.7–€175.7/MWh.
Such convergence highlights the growing influence of cross-border interconnection and regional electricity trading, allowing neighbouring markets to increasingly respond to the same underlying supply and demand conditions.
Yet the integration remains incomplete.
Serbia traded at approximately €157.95/MWh on August 25, already sitting below the closely aligned EU markets.
The divergence became even more pronounced by August 31. Hungary cleared near €173.41/MWh, Romania at €174.90/MWh, Slovenia at €173.61/MWh, Croatia at €172.28/MWh, while Bulgaria and Greece stood at around €171.24/MWh.
Serbia, by comparison, cleared at only €132.21/MWh, leaving a gap of more than €40/MWh compared with Romania.
Transmission availability, domestic generation patterns and differences in national market structures help explain part of this divergence.
However, CBAM is introducing an additional layer of economic differentiation.
During the first quarter of definitive CBAM implementation, commercial electricity exchanges between Energy Community markets and neighbouring EU systems declined by around 25%, while electricity prices in Energy Community markets averaged approximately €30/MWh below adjacent EU markets.
Cross-border trade recovered partially during the second quarter, but the mechanism continues to change the economics of electricity exports from carbon-intensive non-EU power systems.
For renewable generators, the challenge is different.
Their electricity may have very low direct emissions, but capturing the economic value of that advantage requires a credible chain connecting generation, scheduling, contractual allocation and verification at the EU border.
As a result, low-carbon traceability is becoming more than a regulatory requirement; it is increasingly becoming a commercial asset.
For Serbia, Montenegro, Bosnia and Herzegovina and North Macedonia, regional electricity-market integration is therefore developing along two parallel tracks.
Physical interconnection and market coupling can reduce wholesale price differences and increase trading efficiency.
Carbon regulation, meanwhile, can create a new distinction based on where electricity originates and whether its carbon credentials can be demonstrated.
The result could be a Southeast European electricity market increasingly segmented not only by national borders, transmission constraints and local generation, but also by the carbon characteristics and verifiability of every traded MWh.
