The Serbian power market entered 2025 with a sense of momentum. Forward trading volumes had increased sharply, institutional participation had broadened, and futures contracts were firmly embedded in hedging practice. Yet beneath the positive trajectory lay a more sobering reality. Growth, while real, had not yet delivered critical mass. SEEPEX futures were improving, but they still could not carry Serbia’s power risk independently.
The headline figure captured attention. Futures traded for delivery year 2025 reached approximately 2.26 TWh, more than 2.5 times the volume recorded for the previous delivery year. This growth reflected genuine behavioural change. Serbian utilities, traders, and some industrial buyers increasingly embraced exchange-cleared forwards rather than relying exclusively on bilateral contracts.
However, scale matters. Serbia’s annual electricity consumption is several multiples of this traded volume. Even with growth, SEEPEX futures covered only a minor share of underlying physical exposure. More critically, liquidity was unevenly distributed across products.
In 2025, annual baseload contracts accounted for the majority of traded volume, becoming the default hedging instrument. Quarterly contracts traded intermittently, often clustered around specific calendar windows, while monthly products remained thin. This structure allowed participants to lock in headline price levels, but it constrained active portfolio management.
For a hedger placing an annual position, SEEPEX offered reasonable execution up to 10–20 MW clips. Beyond that, market impact became visible, forcing participants either to slow execution or to supplement with external hedges. Once a position was established, adjusting it proved difficult without incurring slippage, particularly outside peak liquidity periods.
This limitation shaped behaviour. Many participants used SEEPEX futures as an anchor hedge, covering a portion of exposure locally, while relying on HUPX or German-linked futures to complete coverage. The result was a layered hedge that reduced outright price risk but introduced basis exposure and execution complexity.
SEEPEX’s progress also failed to resolve congestion-driven volatility. Serbian prices in 2025 remained sensitive to cross-border flows, particularly toward Hungary and Romania. Because forward markets do not hedge transmission risk, SEEPEX futures embedded implicit congestion premia that fluctuated over time. Hedgers could not isolate or neutralise this component.
From an institutional perspective, SEEPEX’s evolution was nonetheless meaningful. Clearing arrangements improved counterparty confidence, reporting transparency increased, and participation broadened beyond a narrow utility core. These developments laid the groundwork for deeper markets in the future.
But by the close of 2025, the conclusion was unavoidable. SEEPEX futures represented progress without autonomy. They reduced dependence on bilateral contracts and improved price transparency, yet they did not eliminate reliance on external hedge venues. For portfolios exceeding 30–40 MW, SEEPEX alone remained insufficient.
The Serbian market thus occupied an intermediate position. No longer embryonic, but not yet self-sustaining. Its forward curve existed, but lacked the density required to internalise national power risk. Until open interest expands across multiple tenors and execution capacity increases materially, SEEPEX futures will continue to function as a supporting pillar, not a standalone hedging foundation.
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