Fragmented Energy Market Poses Challenges for Western Balkans’ Renewable Ambitions

Despite ambitious goals, the Western Balkans face challenges in achieving a fully integrated energy market that supports renewable growth. The Energy Week Western Balkans 2024 revealed that while national regulations and market structures have improved, grid infrastructure and cross-border connectivity remain significant barriers. Dejan Drašković from Montenegrin Power Exchange highlighted that Montenegro’s small market size restricts liquidity, an issue that cross-border market coupling with Italy aims to resolve by 2027. However, further interconnection with neighbouring countries is essential to create a stable and competitive energy landscape. 

The absence of Bosnia and Herzegovina from regional power exchanges was identified as a major obstacle to market integration. Bosnia’s reliance on coal-based power generation, combined with its complex regulatory environment, limits its participation in initiatives aimed at connecting the Western Balkan markets with the rest of Europe. Energy traders and developers expressed concerns over the region’s fragmented regulations and lack of a unified market structure, which complicates project planning and financing. 

Regional stakeholders, including representatives from Danske Commodities and Finance in Motion, agreed that streamlined regulations, consistent balancing rules, and enhanced infrastructure investment are crucial. With billions of euros in potential renewable investments at stake, the Western Balkans must address these fragmentation issues to unlock its full renewable energy potential and meet European energy standards.