Serbia to roll out negative power prices on SEEPEX from May 2026, replacing the zero EUR/MWh floor

Serbia’s organised electricity market is preparing to change how prices are formed, with SEEPEX confirming that negative electricity prices will be introduced from early May 2026. For investors and traders, the shift matters because it removes a long-standing price floor and replaces it with EU-aligned minimum clearing levels—raising both the upside for flexibility and the risk of earnings volatility.

When negative pricing starts and how it will work

The first day-ahead auction that can clear at negative prices is scheduled for 5 May 2026, covering delivery on 6 May. Later that evening, after 23:00 CEST, intraday continuous trading will also allow negative prices.

Under the new rules, the existing price floor of 0 EUR/MWh will be replaced by a lower bound of –500 EUR/MWh on the day-ahead market and –9,999 EUR/MWh on the intraday market. SEEPEX said this aligns Serbia with the harmonised minimum clearing price applied across EU markets.

Why Serbia is making the change

The introduction follows testing procedures and forms part of broader efforts to synchronise Serbia’s market design with European standards. The work is coordinated under frameworks involving ENTSO-E, particularly in preparation for eventual market coupling.

What negative prices mean for dispatch and trading

Negative pricing enables markets to clear even during structural oversupply—when generation exceeds demand and system flexibility is constrained. SEEPEX linked this to conditions becoming more common across continental Europe, where high renewable output can push prices below zero. Solar generation during midday hours and wind output overnight can depress prices, encouraging generators either to reduce output or pay to remain online.

For Serbia’s participants, the change is expected to increase exposure to negative price intervals. Thermal generation assets—predominantly operated by EPS—are likely to face greater pressure during periods of strong regional renewable generation. With many lignite-fired units operating with limited flexibility, economically inefficient dispatch becomes more likely when oversupply drives prices into negative territory.

At the same time, SEEPEX said negative pricing strengthens the role of intraday trading and balancing strategies. A wider pricing spectrum can create arbitrage opportunities but also increases reliance on short-term forecasting and portfolio optimisation.

Flexibility assets and industrial demand stand to gain

The move is also expected to improve the business case for flexibility. Battery energy storage systems and pumped hydro capacity can absorb excess generation during negative price periods and release energy when demand peaks. Industrial consumers with flexible load profiles may also be able to monetise consumption during intervals when prices fall below zero.

Cross-border flows become more important

Because Serbia is interconnected with neighbouring markets—including Romania, Bulgaria and Greece—surplus renewable generation abroad could increasingly influence domestic price formation as regional integration deepens. SEEPEX framed removal of the price floor as a prerequisite for efficient cross-border flows under EU market coupling mechanisms.

VAT treatment adds a financial complication

Beyond market mechanics, SEEPEX highlighted an additional consideration: VAT treatment of transactions at negative prices. Under Serbian legislation, such transactions are treated as a service, meaning domestic companies selling electricity at negative prices remain liable for 20% VAT. That creates potential cash-flow pressure if participants must pay VAT despite effectively paying to offload electricity.

Foreign companies would apply VAT rules based on their country of registration, which could lead to structural differences in trading strategies compared with domestic firms.

Implications for revenue profiles

From an investment perspective, SEEPEX said negative pricing could reshape revenue profiles across generation technologies. Solar assets may see more hours at zero or negative prices due to midday oversupply dynamics, potentially requiring more sophisticated power purchase agreements or co-location with storage. Wind generation remains exposed during periods of strong regional wind conditions, though it is generally less correlated with solar output.

Overall, introducing negative pricing signals Serbia’s transition from a constrained, price-capped environment toward a more dynamic system where volatility becomes part of everyday price formation. As integration with European markets progresses, SEEPEX expects signals to become more granular—reinforcing the value of flexibility, interconnection and active portfolio management across South East Europe’s power sector.