South-East Europe is being assessed as an inflection point between fragmentation and convergence in electricity trading. The regional dynamics highlighted include Hungary’s dominant role, Montenegro’s coupling progress, and Romania’s evolving gas dependency. The assessment points to gradual structural integration alongside continuing market separation.
Regional price spreads remain wide despite interconnections
Fragmentation persists even with physical interconnections between markets. On 24 February 2026, base prices ranged from 40.00 EUR/MWh in Montenegro to 115.25 EUR/MWh in Hungary. The spread is presented as evidence of enduring segmentation.
Coupling progress expected to compress spreads unevenly
Convergence is described as not linear as coupling advances. Under normal conditions, price spreads are expected to compress. Stress events are also expected to continue exposing structural weaknesses.
The stress drivers cited include wind collapse, gas volatility, and congestion. These factors are linked to periods when spreads may widen rather than follow the compression pattern seen in normal conditions.
Forward markets point to short-term volatility
Forward markets are described as increasingly signaling short-term volatility rather than long-term scarcity. This is linked to the view that current dislocations are episodic. The expectation is that market pricing will reflect near-term uncertainty more than persistent tightness.
Deeper integration is expected to reduce discount regimes in Serbia and Montenegro. At the same time, integration is described as importing volatility into those systems.
Hungary as the price core shapes the next trading phase
The next phase of SEE power trading is described as defined by dynamic alignment around Hungary. The regional price core role attributed to Hungary is contrasted with peripheral markets.
Peripheral markets are described as oscillating between integration and localized risk rather than moving uniformly toward convergence. This framing places emphasis on how alignment around Hungary affects trading outcomes across the region.
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