Hydropower’s role in South-East Europe grows as modernization and expansion pick up

Hydropower remains a central pillar of electricity system stability across South-East Europe, strengthening its position as the region’s most reliable renewable source as demand shifts toward greater flexibility and decarbonisation. With more intermittent generation coming online, hydro’s ability to deliver controllable output is increasingly important for balancing the grid, supporting cross-border trade, and maintaining security of supply.

Hydro’s share and flexibility support grid stability

Regional power system data show hydropower accounted for roughly 26% of total electricity generation in the first half of April 2026, remaining the largest renewable contributor in the SEE energy mix. Unlike solar and wind, which can vary sharply, hydropower provides dispatchable generation that helps manage grid stability and improves export optimisation.

Production trends during early April highlight this resilience. Hydropower generation increased by 255 MW compared with the preceding period, helping offset declines in coal and gas output and supporting regional electricity exports. That flexibility becomes more valuable as SEE moves toward higher shares of intermittent renewables.

Modernisation efforts underline investor focus on reliability

Romania is among the region’s hydro leaders. Hidroelectrica has started controlled filling of the Vidraru reservoir and awarded a key transformer contract for modernising the Iron Gates I hydropower plant to Siemens Energy. The upgrades point to Romania’s continued focus on preserving its role as a major electricity exporter and a low-carbon producer.

In Bosnia and Herzegovina, hydropower continues to underpin supply. The Višegrad hydropower plant generated 94.7 GWh in March 2026, bringing cumulative output to 400.4 GWh in the first months of the year. With installed capacity of 315 MW and average annual production around 1,010 GWh, it remains a significant asset for regional electricity availability.

Expansion partnerships and grid upgrades extend hydro’s reach

Montenegro is also looking to expand its hydro portfolio through international partnerships. Discussions between state utility EPCG and France’s EDF regarding the Kruševo hydropower project reflect growing interest in the country’s renewable potential and signal an ambition to use hydropower to support export growth and long-term energy security.

Elsewhere, Albania is modernising its grid infrastructure to better accommodate hydro-dominated generation. The European Bank for Reconstruction and Development has expanded financing for a new underground substation in Tirana, aimed at improving network resilience and strengthening integration of renewable output.

Beyond SEE, Slovenia is investing in hybrid approaches that pair solar with existing water assets, including floating solar projects designed to complement hydropower reservoirs—an example of a broader European trend toward integrated renewable systems.

Why it matters: ancillary services and cross-border exports

As renewable penetration increases across Europe, hydropower’s strategic value is expected to rise further. Its capacity to provide ancillary services such as frequency regulation and peak-load balancing makes it increasingly indispensable in a decarbonising power system. Just as importantly for investors and policymakers in SEE, hydro also supports cross-border electricity exports—positioning the region as a meaningful contributor to Europe’s energy transition.

With modernization investments underway, partnerships expanding project pipelines, and grids being strengthened to handle growing renewable output, hydropower is set to remain the backbone of South-East Europe’s electricity system well into the next decade.