Electricity price differences can reflect constraints that are not directly visible in generation. When lower-cost electricity cannot reach a higher-price area, prices can separate. Congested interconnectors or limited cross-zonal capacity can prevent regional stress from being relieved efficiently.
South East Europe has experienced this pattern, where network limits affect how quickly power can flow between regions. In this context, the availability and use of transmission capacity becomes a key factor for market outcomes. The issue is linked to cross-border movement of electricity rather than only the amount of generation available.
ACER findings on 2024 spikes and the persistence into 2026
The Agency for the Cooperation of Energy Regulators (ACER) concluded that more efficient use of available network capacity between South East Europe and the rest of the EU could have helped ease regional system stress during the 2024 price spikes. ACER also found that the price gap between Southeast Europe and Central Europe persisted through 2025 and into early 2026. The findings point to structural challenges beyond generation mix.
ACER’s assessment highlights that price spikes are not always tied to a lack of total generation. They can also be driven by the inability to move electricity across borders at the right time. A region may be surrounded by lower-cost power yet still face scarcity pricing if grid capacity is unavailable.
Cross-zonal capacity allocation and the 70% requirement
Cross-border capacity allocation has become a central market issue in this setting. ACER recommended finalizing implementation of the EU’s minimum 70% cross-zonal capacity requirement across Central and Southeast Europe. The agency also called for extending market coupling to non-EU neighbors and expanding flow-based capacity calculation and allocation in the region.
The 70% rule is intended to ensure transmission capacity is made available for cross-border electricity trade rather than being reserved for internal grid constraints. In South East Europe, demand, renewable output, and hydro conditions can change quickly, increasing reliance on cross-border access for price convergence. Limited availability of cross-zonal capacity can therefore contribute to persistent regional price separation.
Market coupling gaps between EU and Western Balkan systems
Market coupling is described as a second element affecting outcomes. EU member states participate in increasingly integrated day-ahead and intraday markets, while Western Balkan markets are still moving toward full integration. The Energy Community’s Electricity Integration Package is designed to enable Contracting Parties to integrate into the single European electricity market.
Until integration is complete, liquidity remains fragmented across markets. Traders face more friction, and cross-border flows may not respond efficiently to price spreads. Renewable exporters also face additional complexity, while consumers ultimately bear costs associated with inefficiency.
15-minute day-ahead trading from September 2025
The EU plans to move to 15-minute day-ahead trading from 30 September 2025, replacing 30-minute products. More granular pricing is intended to reflect system conditions more accurately, particularly where variable renewables affect dispatch needs. For South East Europe, the value of granular pricing depends on whether electricity can be moved across time and space.
Fifteen-minute prices can help reveal operational problems tied to congestion patterns, but they do not resolve grid constraints by themselves. If cross-border capacity remains limited, more detailed pricing alone cannot ensure that lower-cost power can reach higher-price areas when needed.
Transmission limits shaping renewable curtailment and project economics
The grid bottleneck also affects renewable development timelines and outcomes. Solar and wind projects may be quick to build, while transmission upgrades typically take longer to deliver. When generation connects faster than grid expansion, systems can experience curtailment, congestion, and lower capture prices.
This mismatch can change project economics even when technical performance is strong. Developers may face the risk that a technically viable project becomes commercially weaker because it cannot deliver power when and where it is valuable. Network constraints therefore influence both physical output delivery and market revenues.
Grid investment as part of energy-transition infrastructure
The source links grid investment directly to energy-transition delivery by listing specific infrastructure elements required for renewable electricity to be usable electricity. Transmission lines and substations are included alongside digital control systems. Other measures mentioned are dynamic line rating, phase-shifting transformers, and improved outage coordination.
The approach described treats these assets as essential rather than secondary components of system development. For investors, it implies assessing connection constraints alongside resource quality such as solar irradiation or wind speed. It also highlights curtailment risk allocation under power purchase arrangements and the role of cross-border capacity availability for trading strategies.
Policy priorities for South East Europe’s next market reform
The policy message focuses on volatility management that cannot rely on generation investment alone in South East Europe. The needs identified include transmission reinforcement, market coupling progress, better capacity calculation, storage deployment, and demand flexibility. These elements are presented as requirements for addressing how grid constraints translate into price divergence.
The grid is described as central to market functioning: when network capacity is constrained, prices diverge; when prices diverge, consumers pay costs while investors hesitate and system stress increases. The next electricity-market reform in South East Europe is framed as requiring both physical changes to build more grid and institutional steps to make better use of existing network capacity.
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