Cross-border electricity flows are the hidden engine of price formation in South-East Europe. While power exchanges provide the visible price signal, it is interconnector availability, congestion patterns and directional flow economics that determine whether those prices converge or fragment. By early 2026, SEE no longer behaves as a collection of isolated national markets, but neither does it function as a fully integrated single zone. Instead, it operates as a patchwork of semi-coupled corridors, where value is created or destroyed at borders rather than at power plants.
The most important structural change since the crisis years is that cross-border flows have shifted from emergency balancing to continuous arbitrage. During 2022–2024, borders were often politically constrained, export-limited or administratively distorted. In 2026, most of these measures have been relaxed, allowing interconnectors to resume their core economic role: transmitting price signals between zones. The result is that congestion rents, rather than domestic generation costs alone, have become one of the largest components of wholesale electricity economics in SEE.
The Hungary–Romania, Hungary–Serbia, Romania–Bulgaria and Bulgaria–Greece borders now form the backbone of regional price transmission. These corridors link the largest volume hubs—HUPX, OPCOM and IBEX—to deficit or volatility-prone systems in the Western Balkans and Southern Europe. Where these borders are unconstrained, prices align rapidly. Where they bind, divergence can exceed €20–40/MWh within the same delivery hour.
Hungary sits at the centre of this system not because it is the cheapest market, but because it is the most connected optimisation node. Power flows into Hungary from Romania and Slovakia during surplus conditions and flows out toward Serbia, Croatia and Slovenia during peak demand. On normal winter days in January 2026, Hungary routinely acted as both importer and exporter within the same 24-hour period. This bidirectional behaviour is a hallmark of mature flow economics. It means the Hungarian price increasingly reflects regional marginal value, not just domestic generation.
The Hungary–Serbia border is one of the most strategically important in the Western Balkans. Serbia’s internal market, anchored by SEEPEX, has grown sufficiently liquid that it now both absorbs imports and exports surplus hydro or thermal output. In January 2026, price spreads between Hungary and Serbia frequently ranged between €5 and €15/MWh, widening sharply during Serbian peak hours when domestic flexibility tightened. Where cross-border capacity was fully available, these spreads collapsed within hours. Where capacity was constrained, Serbian prices decoupled, feeding directly into higher industrial procurement costs.
Romania–Hungary flows represent a different dynamic. Romania’s diversified generation mix allows it to export steadily during both base and shoulder hours. As a result, Romania often functions as a net stabiliser rather than a volatility transmitter. In early 2026, Romanian exports into Hungary helped dampen price spikes during cold spells, keeping Hungarian day-ahead prices closer to €110–120/MWh rather than pushing toward €130/MWh. This stabilisation effect is one reason Romanian prices are increasingly used as reference points in long-term supply contracts beyond Romania itself.
The Romania–Bulgaria corridor has emerged as one of the most consistently utilised borders in SEE. Both systems possess strong baseload—nuclear in both cases—and significant export capability. As a result, flows on this border are less about emergency balancing and more about fine-tuning marginal pricing. Typical congestion rents on this corridor in winter conditions range between €2 and €6/MWh, small but persistent. For traders, this represents low-risk, high-frequency arbitrage. For industry, it means price convergence is relatively reliable, reducing extreme volatility.
The most commercially visible congestion occurs on the Bulgaria–Greece border. Greece’s gas-heavy marginal pricing and rapidly growing renewables create sharp intraday swings, while Bulgaria’s nuclear-anchored baseload offers relative stability. The result is a structurally asymmetric corridor. In January 2026, directional price spreads frequently exceeded €7–10/MWh, with peak-hour excursions significantly higher during low wind or high gas price intervals. This border has become one of the most monetised corridors in SEE, with congestion rents representing a material revenue stream for capacity holders.
This has direct consequences for Greek industry. Even when Greek renewable output is high, constrained export or import capacity can prevent price relief from neighbouring zones. As a result, Greek industrial consumers often face delivered prices €8–15/MWh higher than equivalent consumers in Bulgaria or Romania, despite geographic proximity. The difference is not generation cost; it is border economics.
Moving westward, the Serbia–Croatia and Croatia–Slovenia borders illustrate how hydro flexibility interacts with congestion. Croatia’s hydro system allows it to shift exports dynamically, but limited interconnector capacity means these exports cannot always reach the highest-value markets. Slovenia’s integration with Austria via BSP SouthPool allows some relief, but bottlenecks remain. When congestion binds, Croatian prices can decouple by €10–20/MWh, feeding into volatility for industrial buyers reliant on indexed supply.
The ADEX framework linking HUPX, SEEPEX and Slovenia’s market has begun to change this dynamic by reducing access friction. Although ADEX does not remove physical constraints, it accelerates price signal transmission. Traders can reposition faster, which compresses the duration of price divergence even when absolute convergence is impossible. For industry, this reduces the time-weighted cost of congestion, even if peak prices remain high.
In the southern Western Balkans, cross-border flows remain structurally weaker. Albania and Kosovo, operating through ALPEX, rely heavily on imports during dry or low-hydro periods. Limited interconnector depth means these imports often come at peak prices, with limited arbitrage relief. In January 2026, this translated into sustained price premiums versus Bulgaria and Greece, frequently exceeding €10/MWh during high-load hours.
Montenegro represents the extreme case. With thin liquidity on BELEN and limited cross-border flexibility, Montenegro remains highly exposed to border conditions. When imports are available, prices can collapse. When borders tighten, prices spike sharply. In January 2026, this volatility ranged from sub-€50/MWh hours during surplus conditions to peaks above €200/MWh during constrained periods. For industrial consumers, this volatility is unhedgeable through the exchange alone, forcing reliance on bilateral contracts with large embedded risk premiums.
The economic impact of cross-border flows on industry can be quantified. In markets where congestion hours exceed 25–30% of total peak hours, industrial delivered prices typically carry an additional €8–12/MWh risk premium. Where congestion hours fall below 15%, that premium shrinks toward €3–5/MWh. This difference is not theoretical. It is directly observable in supply contract margins across SEE.
Trading companies play a central role in enforcing this discipline. Firms such as Axpo, MET Group, Statkraft, RWE Supply & Trading and Engie Trading operate precisely at these borders, monetising congestion while simultaneously narrowing unjustified spreads. Where they can trade freely, borders become economic valves. Where they cannot, borders become cost barriers.
By early 2026, the cross-border hierarchy in SEE is therefore clear. Romania–Hungary and Romania–Bulgaria are stabilising corridors. Bulgaria–Greece is a high-value, high-volatility corridor. Hungary–Serbia is the Western Balkans’ main transmission spine. Croatia–Slovenia is a constrained but strategically important gateway. Albania, Kosovo and Montenegro remain peripheral until deeper coupling materialises.
For industry, the conclusion is structural rather than cyclical. Electricity competitiveness in SEE is no longer determined primarily by national generation costs. It is determined by how often borders are open, how quickly prices transmit, and how deeply arbitrage can operate before congestion binds. Until cross-border capacity expands and coupling deepens, geography will remain a cost item on the balance sheet—priced in euros per megawatt-hour, every hour of the year.
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