By 2030, the electricity systems of the Western Balkans are expected to move from being peripheral to the European market to occupying a central role in South-East Europe’s flexibility challenge. The region is described as acting as swing supply, a source of congestion, and a location where structural price volatility can emerge. The assessment is based on modelling by Agora Energiewende together with the REKK Foundation. It links system outcomes to interactions among ageing baseload assets, climate-exposed hydropower, variable renewables, and cross-border integration depth.
The starting point for the 2030 horizon is a generation mix shaped by earlier investment cycles. Serbia, Bosnia and Herzegovina, Kosovo*, and parts of North Macedonia are described as remaining heavily dependent on lignite-fired generation built decades ago for baseload operation. Albania and Montenegro are described as relying disproportionately on hydropower for both energy and balancing. The legacy system is said to have supported adequacy under predictable demand and stable hydrology, while the report characterises it as a source of structural fragility under higher climate volatility and variable renewables.
Thermal plants retained, but operating patterns shift
The modelling does not assume a rapid collapse of existing thermal capacity by 2030. Instead, lignite and coal plants are projected to continue operating while changing their dispatch role. Utilisation rates are expected to decline materially because wind and solar output across Romania, Bulgaria, and Greece suppress run hours during daylight and high-renewable periods. The same units are then described as returning to dispatch during evening ramps, winter cold spells, and prolonged low-renewable events.
This change in dispatch timing is presented as creating a situation where thermal assets are simultaneously uneconomic in energy terms and still needed for adequacy. The report describes this as a paradoxical system outcome rather than a disappearance of capacity. It frames the operational requirement for thermal generation as tied to stress-hour needs even as market signals shift with renewable output patterns. In that context, the study highlights how profitability and reliability functions diverge.
Serbia as load centre and transit corridor
Serbia is identified as a pivotal node in the 2030 configuration. It is described as the largest load centre in the Western Balkans and also a major transit system between Central Europe, Romania, and the southern Balkans. By 2030, Serbian lignite is described as remaining essential for regional security of supply during stress hours. At the same time, its economic viability is described as increasingly undermined by carbon exposure and declining capacity factors.
Agora’s dispatch simulations are said to show Serbia’s system oscillating between export conditions and scarcity within the same day. The driver cited is solar-heavy midday surpluses followed by evening deficits. The report characterises this intraday volatility as becoming a defining operational characteristic rather than a one-off feature. It links these swings to how renewable output shapes dispatch across connected markets.
Hydropower reliability under climate variability
The analysis treats hydropower more cautiously than political narratives that describe it as the region’s natural advantage. While annual hydro generation is described as broadly stable in energy terms, temporal reliability is said to deteriorate. Climate-driven variability is described as increasing the frequency of dry spells and reducing predictability at times when flexibility is most valuable. Albania and Montenegro, whose systems are dominated by hydro, are described as facing amplified exposure to hydrological risk.
Bosnia and Herzegovina’s mixed hydro-thermal profile is described as offering partial buffering but not immunity from that deterioration in temporal reliability. The report also states that dry spells coincide with periods when flexibility matters most for balancing needs. This framing places emphasis on timing risk rather than annual energy volumes alone. It also connects hydrological uncertainty to broader regional balancing requirements.
Bidirectional trade dependence under drought conditions
The study rejects an assumption that the Western Balkans can function indefinitely as a net flexibility exporter to the rest of South-East Europe. In high-hydro years, surplus exports are described as remaining possible. During coincident drought and heat conditions, however, the region itself is described as becoming structurally short. Under those conditions, cross-border dependence is said to reverse.
The report describes imports into the Western Balkans from Romania, Hungary, Bulgaria, and Greece during such stress periods. It presents this bidirectional dependency as central to future price dynamics across the region. The implication within the analysis is tied to how scarcity can shift location when hydrology deteriorates at the same time across connected areas. That shift affects both operational balancing needs and market outcomes.
Wind volatility and solar-driven evening stress
In the 2030 scenario, wind and solar deployment is described as accelerating across the Western Balkans but unevenly across geography with limited diversification. Serbia and Bosnia and Herzegovina are said to account for most wind additions, while solar expands more evenly across North Macedonia, Albania, and Kosovo*. The modelling indicates that wind output volatility in the region is higher than in Central or Western Europe due to more concentrated wind regimes and less geographic smoothing.
The report states that hour-to-hour swings in wind output are materially larger than the EU average. It links these swings to a need for regional balancing rather than national self-sufficiency based on installed generation alone. Solar generation is then described as creating a separate structural challenge through high midday output that suppresses prices and displaces thermal generation. The evening ramp is described as creating acute scarcity when solar output collapses while demand remains elevated.
Gas ramping role amid limited storage
The 2030 outlook describes gas-fired generation playing a more significant role than public discourse often acknowledges. While gas does not dominate overall energy mix shares in the scenario framing, combined-cycle and open-cycle units are described as becoming primary fast-ramping resources during solar drop-off periods and wind lulls. Utilisation factors are said to rise sharply compared with early-2020s baseline levels, particularly in Serbia and North Macedonia.
The modelling is also characterised as challenging an idea that gas can be bypassed entirely without replacing its flexibility function through storage or advanced demand response. However, storage and demand-side response are described as underdeveloped in the 2030 scenario because policy, market design, and investment frameworks lag behind technical need. As a result, hydro resources and cross-border trade are said to shoulder most balancing responsibilities. Concentrating flexibility in these areas is presented as heightening systemic risk during coincident stress events.
Network constraints separate availability from deliverability
Network constraints are presented as amplifying these challenges in stressed conditions. The Western Balkans are described as embedded in critical north–south and east–west flow corridors including Serbia–Romania, Serbia–Hungary, Bosnia and Herzegovina–Croatia, and Albania–Greece. Agora’s modelling indicates these interfaces binding repeatedly under stress conditions can isolate local markets even when surplus capacity exists elsewhere. In such hours, scarcity pricing is described as emerging because energy cannot be delivered where it is needed rather than because it does not exist at regional level.
The report highlights a distinction between installed capacity and deliverable capacity as one of its key contributions. It states that headline reserve margins across South-East Europe appear comfortable in aggregate by 2030. For adequacy risk in the Western Balkans, however, it says location, flexibility characteristics, and network accessibility matter more than megawatt totals overall. It describes adequacy problems increasingly manifesting through price spikes, congestion, and forced redispatch rather than outright blackouts.