Elektroprivreda Srbije (EPS) has released a cautious forecast regarding electricity demand for the period from 2026 to 2028, estimating an annual growth rate of approximately 1 percent in national electricity consumption. This outlook is part of the company’s medium-term business strategy and reflects anticipated steady economic growth, gradual electrification in various sectors, and incremental efficiency improvements across both industrial and residential users.
Concurrently, EPS expects a decline in its own electricity production, projecting a decrease of about 1 percent per year due to aging thermal generation assets, stricter environmental regulations, and the phased retirement or reduced operation of lignite-fired power units. This dual trend of increasing demand alongside decreasing internal supply is expected to create a significant structural gap by 2028, with an estimated shortfall of around 6.5 percent of total national demand.
Currently, Serbia’s annual electricity consumption hovers between 33 and 35 terawatt-hours, influenced by factors such as hydrological conditions and industrial activity. A sustained growth rate of 1 percent would result in an increase of approximately 1.0 to 1.1 TWh over three years. Conversely, the same rate of decline in EPS’s electricity generation would see internal output diminish by a similar quantity. Therefore, by 2028, this arithmetic suggests a net supply gap of about 2.0 to 2.3 TWh annually, which EPS plans to address through electricity imports rather than rapid expansion of domestic generation capacity.
This strategy marks a shift for Serbia from a self-sufficient energy system to one increasingly reliant on regional electricity markets during typical hydrological years. While manageable under stable market conditions, this reliance poses risks related to price volatility during periods of regional shortages, particularly during peak winter demands or droughts in summer.
The plan has sparked public debate following scrutiny from senior political figures questioning whether the projected annual demand growth adequately reflects Serbia’s evolving energy consumption patterns. Notably, there is growing concern regarding the electricity needs of data centers and high-load industrial facilities that require consistent power availability, which could significantly impact overall demand beyond the current projections.
Estimates indicate that advanced industrial or digital facilities may each require between 500 and 600 megawatts of firm capacity—equivalent to the output from two large thermal units at the Nikola Tesla A power plant. The establishment of even a few such facilities could shift Serbia’s demand trajectory upwards, surpassing EPS’s baseline assumptions.
From a strategic planning perspective, this raises important considerations about whether Serbia’s energy strategy is aligned with future growth patterns rather than historical demand trends. Factors such as the electrification of transportation and the gradual phase-out of fossil fuels for heating could introduce upward pressure on demand forecasts. Should annual electricity demand rise by 1.5 to 2 percent instead of the projected 1 percent, the import requirement by 2028 could escalate to between 3.0 and 4.0 TWh annually.
EPS currently boasts an installed capacity exceeding 7,300 megawatts, primarily from lignite-fired thermal plants and large hydropower stations, supplemented by wind, solar, and gas-fired units. However, actual dispatchable output is lower due to maintenance cycles and environmental constraints affecting thermal generation and hydropower output variability.
To mitigate these challenges, EPS has proposed a comprehensive investment plan for the years 2026 to 2028 with an estimated capital expenditure of around 422.6 billion dinars (approximately €3.6 billion). This investment will focus on maintaining and modernizing existing thermal and mining infrastructure while enhancing transmission and distribution systems and expanding renewable energy capacity—primarily solar and wind.
While these investments are substantial in nominal terms, their timing and impact on the energy system are crucial. Renewables can enhance annual energy balance but do not inherently resolve issues related to peak capacity without concurrent investments in flexibility measures such as storage solutions or dispatchable backup systems.
An alternative planning approach could involve decoupling energy balance from capacity adequacy while allowing for moderate levels of annual energy imports. This would prioritize domestic investments aimed at securing peak capacity and grid stability through mechanisms like gas-fired peaking units or hybrid renewable-storage projects that provide firm capacity.
Financially, EPS’s current strategy operates under the assumption that managing a supply gap of 6.5 percent through imports is economically viable. However, sensitivity analyses indicate that even minor increases in average import prices could lead to significant additional costs—projected at €20 to €25 million annually for every €10 increase per megawatt-hour at import volumes between 2.0 and 2.5 TWh.
In light of these factors, EPS’s plan reveals a conservative approach focused on maintaining financial stability while transitioning incrementally rather than pursuing aggressive capacity expansion strategies. The effectiveness of this strategy will depend on how accurately future demand growth aligns with current assumptions and Serbia’s ability to secure stable, competitively priced electricity imports during times of system strain.
The period from 2026 to 2028 is poised to be critical for Serbia’s energy landscape as decisions made now regarding capacity planning and demand forecasting will shape whether the country can manage its transition toward a more import-reliant power system without succumbing to market volatility during essential periods for industrial and digital development.
