KEY MESSAGES

• Recurrent summer electricity price spikes in Hungary, Romania, Serbia and Croatia reflect tight supply–demand conditions and constraints in the European transmission network. Across three weeks of high electricity prices in summer 2026 and a comparable reference week in July 2024, a small number of internal grid bottlenecks accounted for a substantial share of the Hungarian–German electricity price spread, which exceeded €50/MWh in the most critical hours.
• A single internal transmission line in Slovakia, V. Ďur–Levice 1, accounted for 50–80% of this spread in three of these four weeks.
• Since 2026, V. Ďur–Levice 1 complied with the EU’s 70% rule. However, the Slovak grid operator subsequently reduced trading capacity by up to 60%, citing operational security needs.
• Constraints on trade imply welfare losses, and the purpose of the 70% rule – however arbitrary the threshold may be – was to require TSOs to make more interconnector capacity available for trade. The current case highlights the shortcomings of European transmission grid governance and points to the following policy priorities:
• • improving transparency around capacity adjustments,
  • strengthening ACER's oversight of high-impact bottlenecks,
  • using monitoring results to prioritise grid investment and funding,
  • aligning investment incentives with the cross-border benefits of internal grid reinforcement,
  • expanding storage and demand-side flexibility to provide complementary relief during critical hours.