SEE balancing markets gather momentum as renewables raise flexibility needs

Balancing markets across South-East Europe are moving toward the center of the region’s electricity system, driven by rising renewable output and tighter day-to-day supply-demand conditions. For investors and operators alike, the implication is straightforward: when generation becomes more variable and interconnections remain constrained, flexibility becomes a core requirement rather than an ancillary add-on.

Why balancing matters more in SEE

During calendar week 13, the interaction between variable renewable generation, fluctuating demand, and constrained interconnections underscored how quickly imbalances can emerge. In response, system operators across the region are increasingly using ancillary services to maintain stability—especially during periods when generation or consumption changes rapidly.

Balancing services cover several product types, including frequency containment reserves (FCR), automatic frequency restoration reserves (aFRR), and manual frequency restoration reserves (mFRR). Together, these mechanisms are intended to keep supply and demand aligned on a real-time basis, limiting deviations that could threaten system stability.

A catch-up with Western Europe

Historically, the development of balancing markets in SEE has lagged behind Western Europe. But recent trends point to a narrowing gap as renewable capacity grows—particularly solar and wind—making rapid-response flexibility more valuable.

Revenue potential is also expanding. Current estimates indicate that assets providing balancing services can earn between €25,000 and €60,000 per MW per year depending on market conditions and participation levels. While these figures remain below some Western European benchmarks, they are increasingly relevant within the overall revenue stack for flexible resources.

Technical variability meets regulatory alignment

The push toward more developed balancing markets is being reinforced by both technical realities and regulatory work. Technically, higher variability from renewable generation is producing more frequent and larger imbalances that require additional resources to restore equilibrium. On the regulatory side, efforts to align SEE markets with European network codes are supporting the development of more sophisticated balancing mechanisms.

How asset operation is changing

The growth of balancing services is altering how assets are run in practice. Rather than focusing only on energy markets, operators are increasingly optimizing across multiple revenue streams—including energy, intraday trading, and ancillary services.

Batteries stand out in this context because they can respond rapidly to system signals. As a result, they are expected to take on an increasingly important role in SEE balancing markets.

Limits remain for cross-border participation

Despite momentum, obstacles persist. Market design varies significantly across SEE countries, and cross-border participation in balancing markets remains limited. Investors also face uncertainty due to limited long-term visibility into balancing revenues.

Even so, the direction appears clear: balancing markets are becoming an integral part of the SEE electricity system—supporting operational stability while opening up new revenue opportunities for flexible assets.