In May 2026, Montenegro’s electricity market exhibited notable changes, with average BELEN prices decreasing from €98.76/MWh in the first half of the month to €83.92/MWh in the latter half, representing a drop of nearly €15/MWh. This shift indicates a growing alignment with pricing trends in Albania and North Macedonia, as opposed to Croatia or Hungary.
Several structural factors contributed to this price movement. Firstly, improved hydro conditions across the Western Balkans led to increased reservoir inflows, which bolstered low-cost electricity generation in the region. Secondly, robust solar energy production in neighboring countries such as Albania, Serbia, and North Macedonia resulted in midday oversupply situations that affected interconnected markets.
Additionally, Montenegro’s strategic location on the Adriatic export corridor towards Italy has gained significance. Regional net exports to Italy transitioned from an average import level of 148 MW in early May to net exports of 102 MW by the end of the month, highlighting enhanced competitiveness of electricity generation in Southeast Europe.
The developments in May also suggest implications for Montenegro’s renewable energy projects, particularly those focused on solar energy. There is an indication that revenue projections for such projects will need to reflect increasing daytime price pressures. As regional photovoltaic capacity expands, projects solely dependent on daytime solar production may face heightened risks of revenue cannibalization.
In contrast, wind energy projects appear to be more favorably positioned. Their strong production profiles during evening and nighttime hours coincide with periods when solar output diminishes and system prices tend to remain high. This trend emphasizes the widening valuation gap between wind and solar energy assets within the Western Balkans.
