South-East Europe remains a strange contradiction in Europe’s energy map. This is a region that has hydropower heritage, available renewable potential, strong interconnection corridors on paper, and strategic positioning between EU and non-EU systems. Yet it continues to live with some of the most volatile, politically sensitive and economically disruptive electricity pricing realities on the continent. Each time weather stress, fuel price shifts or unexpected shocks appear, the region reacts not like a confident modern power market, but like an exposed frontier where fragility can instantly become crisis.
Part of the problem lies not in what South-East Europe lacks, but in how it behaves. Over the past decade, Europe has increasingly moved toward a deeply integrated electricity philosophy. Capacity should move freely. Markets should talk to each other. Regional balancing should smooth price shocks. Liquidity should lower risks. Where that system works, volatility still exists, but it behaves more like a manageable financial signal than a destabilising threat. Unfortunately, in SEE the logic is still more national than regional. Electricity remains a sovereignty reflex. Interconnectors are used cautiously. Trust is conditional. The result is a patchwork of partially connected markets that often behave like guarded islands instead of a confident electricity corridor.
This structural mindset translates into measurable economic consequences. When cross-border flows are constrained, countries are forced to absorb demand shocks alone. Traders price uncertainty aggressively. Risk premiums embed themselves into wholesale pricing. Industries face unpredictable cost bases. Households experience politically explosive tariff tensions. And governments oscillate between intervention, emergency import measures and rhetorical commitment to reform that rarely fully materialises. South-East Europe is not condemned by geography to instability; it is paying a price for delayed integration, slow execution and institutional hesitation.
The way this fragility plays out differs from one country to another, but the pattern is regionally consistent. Serbia sits at the centre of the SEE electricity system both physically and politically. It has one of the strongest hydropower assets in the region and a system historically capable of balancing tension beyond its borders. But it is also still recovering credibility after the disastrous electricity crisis that exposed coal fleet vulnerability, poor management decisions and lack of resilience. Hydrology helps Serbia when water conditions are favourable, yet drought cycles repeatedly underline that it is not a guaranteed cushion. Serbia could be the stabiliser the region desperately needs. It also carries vulnerabilities that require discipline, transparency and long-term reform commitment if that stabilising role is to become permanent and reliable rather than conditional.
Montenegro’s experience tells a very different but equally important story. This is a small system that proved that size does not decide electricity strength. Montenegro emerged as a net exporter, demonstrating operational maturity and stability while aligning closely with European frameworks. Its positioning gives it outsized strategic relevance, especially in relation to Italy and wider EU integration, and its hydropower structure gives it an important decarbonisation advantage. Montenegro shows what happens when consistent governance, cooperation culture and market openness outweigh structural scale.
Greece embodies both ambition and consequence. Over the past years, it has transformed from a struggling energy sector into one of Europe’s fastest modernising power markets. Renewables are growing rapidly. Capital flows are strong. Liberalisation is taking shape. But success brings system stress of a different kind. Oversupply periods depress prices. Curtailment risk increases. Storage becomes mandatory rather than optional. Balancing becomes more psychologically demanding and operationally complex. Greece has left the past behind but must now build the infrastructure, interconnectors and market sophistication needed to manage the future it is rapidly accelerating into.
Romania holds enormous regional significance. Its nuclear base remains a powerful stabilising factor. Its renewables sector is accelerating. Its system scale matters. Yet Romania frequently finds its ambition slowed by administrative hesitation and inconsistent regulatory execution. It has the assets to become the most stabilising regional electricity force in SEE, but that role demands sustained policy confidence, clear frameworks and institutions capable of moving as quickly as the market they intend to shape.
Bulgaria continues to exist as one of the most strategically paradoxical energy environments in the region. It has strong generation, meaningful export behaviour, nuclear strength and geographic importance. Yet unpredictability in policy direction repeatedly sends mixed signals to investors and traders. Bulgaria could be a shock absorber for the region. It could also remain a transmitter of volatility depending on how consistently it governs its electricity future.
Hungary, meanwhile, reveals why integration matters. With limited domestic generation and strong dependence on imports, Hungary is structurally exposed. When SEE acts as a fragmented region, Hungary becomes one of the primary victims of price spikes and market stress. This reality drives Budapest to support integration mechanisms, but also to protect itself through careful, sometimes defensive strategy. Hungary therefore stands as both beneficiary and influencer of whether SEE behaves like an open energy ecosystem or a compartmentalised defensive zone.
Bosnia and Herzegovina has enviable hydropower assets and strong coal presence but is paralysed by internal political fragmentation. Electricity could be its economic super-strength. Instead it remains trapped inside governance complexity. North Macedonia occupies perhaps the most delicate position of all: import-dependent, price-exposed and politically vulnerable to electricity instability. For Skopje, regional integration and functional cross-border openness are not abstract European alignment concepts; they are existential conditions for economic stability and social calm.
The uncomfortable truth is that South-East Europe is not suffering because it cannot do better. It suffers because it will not fully commit to the integration, governance coherence and confidence that modern electricity systems require. Until cross-border trust becomes as natural as national reflex, until regulators enforce discipline rather than negotiate delay, and until electricity policy is treated as economic strategy rather than political theatre, SEE will remain caught in its power trap: a region rich in capacity that nonetheless lives permanently close to instability.