South East Europe’s power markets are moving into a more sophisticated and competitive phase. The next two years are expected to feature deeper exchange liquidity, expanding intraday trading, and wider use of 15-minute pricing. Battery participation is also set to grow, alongside continued cross-border constraints and tighter compliance requirements.
The 2026–2028 outlook is described as partial integration rather than full convergence. The period is expected to combine hybrid market conditions with persistent volatility, affecting both opportunities and challenges for market participants.
EU market coupling and the shift to 15-minute day-ahead trading
EU markets in South East Europe are continuing to align with broader European market design principles. Hungary, Romania, Bulgaria, Greece, Croatia and Slovenia are already integrated into the wider EU market-coupling framework.
A transition to 15-minute day-ahead trading from 30 September 2025 is expected to change price formation. The move is expected to create more granular price signals and increase the commercial value of flexibility.
Western Balkan market development across SEEPEX, ALPEX and MEMO
Western Balkan market development is continuing at different speeds. Serbia is described as the region’s most strategically important market due to SEEPEX, the introduction of negative pricing, its central geographic position, and its role in regional electricity flows.
Albania and Kosovo have established a coupled day-ahead market through ALPEX. North Macedonia has expanded market functionality through the launch of intraday trading on MEMO, while Bosnia and Herzegovina remains the largest missing component in organized market development.
Market coupling timeline and hybrid trading conditions
Market coupling is expected to progress but not immediately. In December 2025, the Energy Community said the earliest market coupling for Contracting Parties could occur in 2028, subject to compliance verification by the European Commission.
Traders are therefore expected to operate in hybrid conditions for several more years. These conditions are described as involving coupled borders alongside explicit transmission arrangements and uneven liquidity across markets.
Volatility drivers: capacity limits, flexibility gaps and renewable output
ACER monitoring of Southeast Europe has highlighted limited cross-zonal capacity and insufficient system flexibility as major contributors to market stress events. Price volatility is expected to remain a defining feature of the regional market.
As renewable generation expands, the region is expected to see more low-price or negative-price periods during midday hours. Flexibility is also expected to become increasingly valuable during evening demand peaks.
Batteries, CBAM uncertainty and cross-border trade impacts
Battery storage is expected to gradually reshape price formation but is unlikely to remove volatility entirely. Storage deployment may reduce some intraday price extremes, while other factors continue driving significant price movements.
Those factors include cross-border constraints, hydro variability, heatwaves, natural-gas market developments and CBAM-related effects. CBAM is also expected to remain one of the largest uncertainties for Western Balkan–EU electricity trade.
In Q1 2026, commercially scheduled exchanges between the EU and the Western Balkans declined by 25%. Over the same period, day-ahead prices in Energy Community Contracting Parties averaged €30/MWh below neighboring EU markets.
The source conditions for trade attractiveness are linked to carbon-accounting frameworks, transit rules and origin-certification requirements. Until these elements become clearer, some economically rational trades may remain commercially unattractive.
Compliance requirements across traders, utilities, renewables and industry
The primary beneficiaries of the evolving structure are described as sophisticated trading firms, integrated utilities, battery operators, hydro asset managers, flexible industrial consumers and exchanges able to attract deeper liquidity. Participants relying on simplistic baseload assumptions or weak compliance structures are described as facing increasing challenges.
REMIT compliance is highlighted for traders alongside weather forecasting expertise. Other operational elements include cross-border capacity management, quarter-hour optimization, CBAM documentation capabilities and disciplined collateral management.
For utilities, trading is described as shifting toward portfolio optimization rather than a standalone function. Generation assets, customer supply obligations, PPAs, storage resources, balancing responsibilities and cross-border positions are expected to be managed as an integrated portfolio.
Renewable-energy developers are expected to incorporate negative pricing into market assumptions. The source also points to capture-price risk, imbalance exposure and basis risk as factors affecting future project revenues based on when and where electricity is delivered.
Industrial buyers’ procurement strategies are described as needing to move beyond annual baseload thinking. Key risks are tied to hourly and quarter-hourly shape exposure, evening peak pricing, solar PPA mismatches and index basis risk.
Regulatory priorities for coupling, balancing design and storage rules
The regulatory priorities listed include accelerating market coupling and expanding usable cross-zonal capacity. The source also highlights strengthening balancing-market design and clarifying storage regulations.
REMIT enforcement improvements are included alongside efforts to reduce CBAM-related trade distortions. The overall expectation is that South East Europe will not become a simple or perfectly integrated electricity market by 2028.
The region is instead expected to become more transparent and more liquid while remaining attractive for investment. Participation in that environment is described as requiring higher levels of technical, commercial and regulatory sophistication.
The source describes future trading value across five dimensions: time, location, flexibility, carbon and compliance. It characterizes the emerging SEE power-market outlook as involving more exchange-based trading, greater cross-border complexity and continued volatility tied to participants’ ability to manage these elements.