Southeast Europe is seeing higher volatility, greater renewables penetration and increased exposure to intraday trading signals, while market liquidity remains uneven. Week 21 highlighted a contrast between large liquid venues such as Italy’s IPEX and smaller regional platforms including SEEPEX. Traded volumes on the smaller exchange remained shallow.
Italy traded around 20,800 GWh during the week. Greece recorded 3,480 GWh, Bulgaria 2,370 GWh, Hungary 2,340 GWh, and Serbia’s SEEPEX only 130 GWh. The gap in liquidity was visible across the compared markets.
Liquidity levels and price formation across Southeast Europe
In a renewable-heavy system, price discovery depends on deep participation, active intraday adjustment and reliable balancing signals. When liquidity is thin, prices can become more volatile and spreads can widen. Hedging also becomes harder for producers, traders and industrial buyers.
For Serbia, SEEPEX’s low traded volume is described as a structural limitation. The market can still show clear price signals, but it does not provide the same depth as larger European exchanges. This difference affects renewable bankability through the ability to hedge merchant exposure in addition to average prices.
Implications for long-term contracting and industrial PPAs
The same liquidity issue extends to industrial power purchase agreements. Exporters exposed to CBAM may seek long-term renewable contracts, but pricing those contracts requires credible market references. A shallow exchange can limit the structuring of bankable offtake formulas.
Such constraints can affect floor prices, balancing clauses and indexed supply agreements. The availability of market references is linked to the depth of trading on the relevant exchange. Where traded volumes are limited, contract structures may be more difficult to support with observable benchmarks.
Benchmark roles of HUPX and IPEX amid uneven regional depth
Hungary’s HUPX is cited as a regional benchmark due to stronger liquidity and its position between Central Europe and the Balkans. Italy is described as the premium market because of scale, structural import dependence and high gas exposure. Serbia, Bulgaria and Croatia are still developing the liquidity needed to monetize renewable-driven volatility.
The report places emphasis on how exchange depth interacts with intraday trading needs. It also links regional differences in liquidity to how participants manage price movements across timeframes. The comparison between IPEX and SEEPEX serves as the main example from Week 21.
Solar output growth raises intraday price movement requirements
The liquidity question is increasingly tied to solar generation trends. In Week 21, regional photovoltaic output rose 8.1%, while thermal generation fell 5%. Higher solar output is associated with more intraday price movement.
Without deeper intraday and balancing-market liquidity, participants are described as unable to manage that volatility efficiently. The interaction between generation mix changes and market depth becomes a key operational factor for trading and balancing activities during periods of higher solar output.
Trading execution risk and storage revenue sensitivity
Thin liquidity is presented as creating both opportunity and risk for traders. Wider spreads and sharper price movements can occur alongside increased execution risk. Large positions may be harder to hedge or unwind during stressed system conditions.
Liquidity is also highlighted for storage investment outcomes. A BESS project depends on capturing price spreads, but if intraday and balancing markets are shallow, the technical value of storage may not translate into reliable revenue. The effect is tied directly to how spreads can be realized through market participation.
Week 21 highlights next steps for market depth in Southeast Europe
Week 21 is used to frame Southeast Europe’s next energy-market challenge as building trading depth rather than only adding generation or interconnectors. The focus includes stronger exchange liquidity, improved intraday coupling, deeper balancing markets and more transparent congestion pricing.
The material also states that without stronger liquidity, SEE markets could become physically more renewable while remaining commercially less bankable. With deeper exchanges and better market coupling, volatility can be converted into investable value through trading participation across relevant timeframes.