Key Takeaways
- €151/MWh: Average 2-hour day-ahead power market spread in 2025 in Romania
- 93GW: BNEF’s forecasted solar capacity additions 2026-2036 in the six European markets covered in this report
- 4GW: Battery capacity by July 2026 in Bulgaria, a market with 7.4GW peak power demand in 2025
Power sector investment in Central and Southeast Europe is surging. Solar remains the main source of new generation, but returns are increasingly shaped by when and where electricity is produced. Falling realized prices for merchant renewable power, grid connection constraints and coal closures are shifting value toward flexibility from batteries, transmission, and new sources of power demand.
- Total solar capacity is set to more than double by 2036, adding 93 gigawatts (GW) from the end of 2025 with Poland, Romania and Bulgaria leading growth. As realized power prices fall, the value of Contracts for Difference (CfDs), power purchase agreements (PPAs) and co-location with storage is increasing. The EU Modernisation Fund, financed by emission trading system (ETS) revenues, is accelerating investment in renewables, storage, and grids.
- Wind offers a complementary generation profile, but permitting bottlenecks and limited CfD support constrain deployment. BNEF expects 20GW of wind additions by 2036, doubling from 21GW installed at the end of 2025.
- Battery storage is booming, supported by subsidies and high power-price volatility. Power price spreads in the region are among the highest in Europe due to tight evening supply, inflexible coal generation, and rising solar penetration depressing midday prices.
- Average two-hour day-ahead spreads ranged from €118 to 153 per megawatt-hour (MWh) across the six markets in 2025. These spreads widened in 2026 (Figure 1), partly due to the impact of the Iran war’s effect on commodity prices. BNEF estimates a battery coming online in 2026 would require a minimum spread of €85/MWh over the project’s lifetime.
- Merchant returns will not necessarily remain good as storage deployment grows. Bulgaria shows the scale of uptake as grant-backed projects total roughly 6-8GW, compared with peak power demand of 7.4GW in 2025. Bulgaria’s growing battery fleet is already reshaping peak power flows in the region.
- Grid access is becoming one of the region’s scarcest assets for project development. Transmission system operators are tightening connection rules through requirements for milestones, guarantees, competitive allocation and flexible connections. These reforms should release capacity from speculative projects, but connection timing remains a key development risk.
- Coal is becoming less economic, but replacing its firm capacity is proving difficult. Coal still supplied 34% of regional generation in 2025, while security-of-supply concerns are delaying some closures as replacement capacity lags. Gas remains important for adequacy, but rising solar and storage deployment reduces running hours, increasing the dependence of gas power plants on capacity payments and other contracted revenues. New nuclear largely arrives too late to close the near-term gap.
- Approach: This report draws on BNEF’s proprietary data on assets, power markets, PPAs, auctions and costs, project economics tools and long-term scenarios from the New Energy Outlook. This is supplemented by market participant interviews and external policy data.
