The European Commission has framed grid investment as a prerequisite for Europe’s next electrification phase. Electricity demand across Europe is expected to rise by around 60% by 2030, driven by electric vehicles, heat pumps, data centres and electrification of industrial processes. In systems already constrained by ageing infrastructure and limited cross-border capacity, grid adequacy is expected to become a macroeconomic variable for power markets.
For South-East Europe (SEE), transmission density is lower and redundancy is limited compared with core EU regions. The Commission’s approach is aimed at lower energy prices, faster renewable integration and reduced dependence on external suppliers. The transmission channel highlighted in the policy direction runs through cross-border capacity, congestion reduction and price convergence.
Demand growth and congestion costs
One of the economic signals cited for the Commission’s grid push is the cost of congestion. Across Europe, congestion management and redispatch costs have risen from approximately €5.2 billion in 2022 toward a trajectory of roughly €26 billion per year by 2030 if bottlenecks are not structurally addressed.
In SEE, congestion costs are described as rarely appearing transparently on system operators’ balance sheets. Instead, they are said to materialise indirectly through renewable curtailment, emergency imports, forced exports at depressed prices and ad-hoc regulatory interventions. Grid reinforcement is expected to reduce these distortions by enabling surplus power to flow outward and deficit areas to import reliably.
Energy corridors and the Trans-Balkan Electricity Corridor
The Commission’s focus on energy corridors is presented as a way to remove critical bottlenecks that prevent renewable electricity from reaching demand centres. This is described as shifting SEE from semi-isolated national systems toward a functional extension of the EU internal electricity market. Hydropower-dominated systems in the Western Balkans, coastal wind zones and fast-growing solar capacity are described as gaining value when cross-border flows are possible.
The Trans-Balkan Electricity Corridor is identified as a coordinated 400 kV backbone linking Serbia, Montenegro, Bosnia and Herzegovina, Croatia, Hungary and Romania. A key segment is the 109 km Obrenovac–Bajina Bašta line in Serbia, with expected completion around 2027. An additional 84 km extension toward Bosnian and Montenegrin borders is targeted for 2028.
Montenegro’s Pljevlja–Lastva section is described as approximately 220 km, complemented by a shorter 15 km Pljevlja–Serbia border connection. Together, these elements are presented as reshaping the feasible trading envelope of the Western Balkans. The corridor is also described as increasing the region’s ability to integrate into Central European power flows.
Price volatility and cross-border trading effects
The market consequences described are linked to interconnection capacity increases reducing price volatility. SEE markets have historically been characterised by sharp price spikes during cold winters or dry hydrological years. They have also seen deep collapses during periods of high hydro or wind output.
Stronger cross-border capacity is described as dampening both extremes by allowing excess generation to be exported rather than curtailed. Imports are also described as capping scarcity pricing during stress events. Over time, this is said to narrow the spread between SEE hubs and Central European benchmarks.
The narrowing spread is described as reducing risk premia embedded in industrial tariffs, hedging products and long-term power purchase agreements. The article also connects these changes to how electricity can be financed and traded across borders. It frames cross-border capacity as a key determinant of how national systems interact with the wider European market.
Adriatic HVDC link and GRITA 2 interconnector
The Adriatic interface is highlighted through an existing Italy–Montenegro HVDC link operating at 500 kV DC with 600 MW of capacity. The link is described as having already altered regional trading dynamics. Plans for a second cable would double exchange capability to 1,200 MW.
The second cable is described with an estimated investment of around €500 million, with target commissioning around 2031. If realised, Montenegro is described as becoming a major gateway between SEE generation assets and the Italian market. The value of this gateway is presented as depending on whether the EU internal grid can absorb the flows.
A further development cited is GRITA 2, the planned second Italy–Greece interconnector. It is described as having up to 1,000 MW of capacity over roughly 300 km, with an investment value close to €2 billion. Although it does not physically cross the Western Balkans, its effect is described as propagating through interconnected markets.
Renewables integration and industrial electrification
The transmission investments are also linked to efforts to accelerate renewable integration across SEE countries. The region holds significant untapped hydro, wind and solar resources, while grid saturation is described as acting as a binding constraint on deployment. Grid expansion is said to shift this constraint by reducing curtailment risk.
Curtailment risk declines are paired with improved capture prices and tighter financing conditions in the description provided. For lenders and investors, revenue risk is described as becoming driven more by market fundamentals than structural grid limitations. The article connects these changes to how projects may be assessed under evolving network conditions.
The grid agenda is also described as intersecting with industrial electrification under EU industrial policy for steel, chemicals, cement and transport processes moving toward electricity-based pathways. Cross-border supply credibility is presented as a competitiveness factor for SEE’s legacy hydro capacity and still-moderate generation costs when backed by reliable import and export capability.
Security of supply and execution milestones
The article describes reduced dependence on external energy suppliers as not implying national self-sufficiency but deeper mutual dependence within Europe. Stronger interconnections are presented as sharing system stress rather than isolating it across countries. For SEE governments and state-owned utilities, this is linked to lowering the probability of crisis-driven interventions such as emergency imports, subsidies or forced price caps.
The medium-term picture presented is that Commission-led grid expansion redraws SEE’s energy map from a volatile edge market toward a structural contributor to Europe’s balancing, flexibility and renewable absorption. Tangible figures cited include 600 MW existing Adriatic exchange with a pathway to 1,200 MW, plus 1,000 MW of new Italy–Greece capacity.
The Trans-Balkan backbone at 400 kV, stretching hundreds of kilometres, is referenced with completion milestones clustered between 2024 and 2028. Execution is described as dependent on regulatory alignment, system operation and market rules keeping pace with grid assets.