Montenegro emerged as one of the most interesting markets during May.
Average BELEN prices fell from €98.76/MWh in the first half of the month to €83.92/MWh in the second half, a decline of almost €15/MWh. The market increasingly aligned with Albanian and North Macedonian pricing rather than with Croatia or Hungary.
Several structural drivers explain this movement.
First, hydro conditions improved across the Western Balkans. Higher reservoir inflows increased available low-cost generation throughout the region.
Second, strong solar output in neighboring Albania, Serbia and North Macedonia created midday oversupply conditions that increasingly spilled across interconnected markets.
Third, Montenegro’s position on the Adriatic export corridor towards Italy became more valuable. Regional net exports to Italy shifted from an average import position of 148 MW in the first half of May to exports of 102 MW in the second half, demonstrating improving competitiveness of SEE generation.
For Montenegro’s future renewable projects, particularly solar developments, May provided another indication that merchant revenue assumptions will need to account for increasing daytime price pressure. Projects relying solely on daytime solar production face growing cannibalization risk as regional photovoltaic capacity continues expanding.
Wind projects remain better positioned. Strong evening and nighttime production profiles align with periods when solar output disappears and system prices remain elevated. This reinforces the growing valuation gap between wind and solar assets in the Western Balkans.
Elevated by Virtu.Energy
