The integration of European electricity markets is found on the principle that, in the absence of transmission constraints, wholesale electricity prices across bidding zones should converge. Under the EU Target Model and the market coupling framework promoted by the European Commission, cross-border capacity is allocated implicitly through price coupling, allowing electricity to flow from lower-price to higher-price areas until prices equalize or available transfer capacity becomes binding. However, EU monitoring exercises and regional modelling studies have repeatedly identified South-East Europe (SEE) as structurally less integrated than the Central Western European (CORE) region. Evaluations by the European Court of Auditors and economic assessments by the OECD emphasize that limited cross-border capacity and recurrent congestion can hinder price convergence in peripheral markets. Similarly, analytical work by REKK – also discussed in previous Net-Zero Lab analyses – highlights the role of physical transmission constraints in explaining persistent or episodic price divergence within Central and South-Eastern Europe. Bulgaria is currently part of the South-East Europe Capacity Calculation Regions (CCRs) together with Greece and Romania, which provides the country with more efficient electricity trading and improved security of supply, particularly during periods of high or low demand.
Against this background, the 2025 hourly dataset for Bulgaria (BG), Romania (RO), and Greece (GR) enables a direct empirical assessment of whether interconnection use and capacity limits contribute to price isolation in Bulgaria, or whether observed price patterns instead reflect the structural positioning of the wider SEE region within the European electricity system. The analysis is based on hourly day-ahead wholesale prices, cross-border physical flows (BG–RO and BG–GR, in both directions), forecast day-ahead transfer capacities, and derived indicators including price spreads, net flows, utilization rates, and congestion indicators.
Bulgaria–Romania: High Integration and Rare Congestion
The Bulgaria–Romania border exhibits a high degree of price convergence in 2025. During uncongested hours, the average absolute price spread was only 1.4 EUR/MWh, indicating near-complete wholesale price alignment under normal conditions. Congestion was recorded only twice during the entire year. At its busiest, the connection was used up to 93% of its forecast transfer capacity, carrying about 1,740 MW, but it never became overloaded. Even during the two congestion hours (9 July, 08:00–10:00), spreads increased only moderately (to approximately 28 EUR/MWh). The correlation between absolute spreads and utilization is positive and statistically significant (around 0.3), confirming that price differences widen as the interconnector approaches its limit. However, the relatively modest magnitude of the correlation indicates that while capacity scarcity has a measurable effect, it is rarely decisive for price formation on this border. Overall, the BG–RO interconnection functions as a highly integrated corridor, with strong arbitrage efficiency and limited structural separation, leading to that the two countries to behave, in most hours, as a single pricing cluster. When the connection between the two countries is not full (uncongested), electricity flows freely. As a result, prices in both countries become almost identical and they behave like one single market.
Bulgaria–Greece: Episodic but Economically Significant Constraints
The Bulgaria–Greece border presents a more complex pattern. While prices frequently converge, 2025 includes several episodes of very large spreads in both directions. The most extreme negative spread occurred on 30 March 2025 at 06:00, when Bulgarian prices dropped to approximately 1.23 EUR/MWh, similar to Romania and many other EU markets during that low-demand period. In contrast, Greek wholesale prices exceeded 200 EUR/MWh – the highest observed in the EU during that hour – producing a spread of –201.69 EUR/MWh. Electricity was flowing from Bulgaria to Greece, because it was much cheaper in Bulgaria and much more expensive in Greece. The persistence of a very large spread despite active exports indicates that available transfer capacity was insufficient to fully equalize prices. Later that day, Bulgarian and Romanian prices even turned negative, while Greek prices remained positive, although they declined significantly as regional conditions adjusted.
The opposite configuration occurred on 20 January 2025 at 17:00. Bulgarian prices exceeded 600 EUR/MWh (closely aligned with Romanian prices, and as marked in previous Net-Zero Lab analyses, this was the highest wholesale price level registered for Bulgaria for the whole 2025), while Greek prices were around 276 EUR/MWh, generating a spread of +327 EUR/MWh. Net flow was negative (GR -> BG), again directionally consistent with arbitrage. At that time, Hungarian prices were the highest in the EU (around 616 EUR/MWh), suggesting a broader regional stress event rather than a purely national imbalance. Within three hours, however, prices across BG, RO, and GR converged again, indicating that the divergence was temporary.
Congestion occurred 40 times in 2025, typically during daytime periods in April, June, August, and November. During congestion hours, the average absolute spread was 41.3 EUR/MWh, compared to only 6.1 EUR/MWh during uncongested hours – nearly a sevenfold increase.
The correlation between absolute spreads and utilization is moderate and statistically robust (around 0.4). The slightly higher Spearman coefficient suggests a monotonic but non-linear relationship, consistent with threshold effects: once capacity approaches its limit, spreads widen more sharply.
Overall, the BG–GR border exhibits active arbitrage and frequent convergence, but also episodic and economically meaningful binding constraints.
Regional Integration Structure
The 2025 evidence shows that Bulgaria is not persistently isolated from its neighbours. Bulgaria and Romania operate as a closely integrated pair with minimal structural separation. Bulgaria and Greece are also integrated and responsive to arbitrage signals, but episodic binding constraints generate economically meaningful price divergence during stress periods. When prices equalize across all three countries, the system is effectively functioning as a single bidding zone from an economic perspective. However, previous Net-Zero Lab analyses have shown that Bulgarian wholesale prices tend to be higher than the EU average. The present findings indicate that this is not uniquely a Bulgarian phenomenon: in many periods, Bulgaria, Romania, and Greece move together and exhibit comparable price levels. This points to a regional structural characteristic rather than national isolation.
From a policy perspective, this supports the argument advanced in EU monitoring and REKK modelling: expanding or optimizing cross-border capacity – particularly on corridors connecting SEE markets (such as those through Hungary and Austria) – can reduce extreme spreads and enhance price convergence, but transmission constraints are only one determinant among several (including national and regional generation mix and demand shocks). According to ESO’s most recent Ten-Year Development Plan, the increasing share of intermittent generation expected in Bulgaria and the wider region places significant demands on the national electricity transmission infrastructure, including cross-border interconnections, which will require substantial expansion to support the country’s transition to renewable energy. Strengthening both the domestic grid and cross-border capacity would help reduce curtailment risks and improve access to electricity from neighbouring countries. However, current grid expansion plans are lagging behind renewable capacity growth, which could limit the effective utilization of clean energy investments and create challenges for energy security.
Author: PhD Candidate Lyubimka Georgieva
Data sources: ENTSO-E Transparency Platform (Day-Ahead Market, Energy Prices, Forecast Transfer Capacities, Cross-border Physical Flows)
Analysis performed in Python
Visualisation created in Canva