Elektroprivreda Srbije (EPS) concluded the year 2025 with a notable enhancement in its financial performance, marking a recovery from the operational and financial turmoil that ensued after the 2021 incident at the TENT thermal power complex. Financial reports indicate that EPS achieved a net profit ranging between RSD 38.7 billion and RSD 42.3 billion (approximately EUR 330–360 million), a significant increase from the previous year’s profit of around RSD 24–26 billion. However, this figure remains considerably lower than the exceptional earnings close to EUR 1 billion recorded in 2023, which were bolstered by favorable hydrological conditions and high regional electricity prices.
The recent results demonstrate that EPS has stabilized its operations following years characterized by emergency coal imports, obligatory electricity purchases, and politically charged restructuring efforts. Nevertheless, the composition of its production portfolio reveals that Serbia’s electricity system continues to be heavily reliant on lignite generation. In 2025, coal-fired thermal plants contributed about 71.4% of total electricity generation, while hydropower and renewable sources accounted for approximately 27.3%, with gas-fired generation remaining minimal.
This production mix gained significance during another year marked by weak hydrological conditions. EPS reported a year-on-year decline of around 20% in hydroelectric output, with generation dropping to approximately 8.3 TWh compared to over 10 TWh in 2024 and roughly 12.6 TWh in 2023. This decrease necessitated a greater dependence on thermal generation from lignite facilities, particularly those associated with the Kolubara mining basin.
Coal production saw an uptick during the year, with EPS extracting approximately 32.8 million tonnes of coal in 2025, surpassing both the levels of 2024 and 2023. This improvement reflects ongoing efforts to stabilize the Kolubara mining operations after years of underinvestment and operational challenges, as well as reduced costs associated with external coal procurement, which enhanced profitability.
Despite these gains, EPS’s recovery appears more defensive than transformative. Reports indicate a sharp decline in electricity exports during 2025, nearly halving from previous levels, which suggests that EPS had less surplus generation available for regional markets. The record profitability observed in 2023 was significantly supported by export opportunities during periods of elevated regional prices; thus, diminished export capacity in 2025 indicates that EPS operated more in a system-balancing capacity rather than as a major exporter.
Additionally, EPS continued to incur substantial expenses related to market electricity purchases and balancing costs. The procurement costs for electricity and system access reportedly rose to around RSD 185 billion, up from RSD 167 billion the previous year, highlighting ongoing exposure to regional market volatility despite improvements in domestic coal production.
Investment activities reveal ongoing structural challenges within Serbia’s energy transition framework. Total investments in 2025 were reported at approximately RSD 52.7 billion, falling short of planned targets and below the execution levels seen in 2024. A key factor contributing to this shortfall was the deferral of a strategic solar plus battery storage project aimed at enhancing renewable energy capabilities; its implementation has been postponed until 2026 due to complexities involved in preparatory work.
This delay is particularly noteworthy as the Hyundai Engineering–UGT Renewables initiative is expected to form a critical part of Serbia’s utility-scale renewable expansion strategy and long-term flexibility plans. The slower rollout of large-scale solar and battery systems perpetuates Serbia’s reliance on aging coal infrastructure, especially during periods of diminished hydrological output.
Financially, EPS continues to grapple with a significant debt load, with long-term liabilities reportedly at around RSD 151.3 billion (nearly EUR 1.3 billion), linked to financing from international lenders including the EBRD and institutions from Japan and China. Despite improved profitability figures, the company faces multiple pressures: ensuring reliable thermal fleet operations, financing transition investments, stabilizing mining activities, and managing politically sensitive electricity tariffs.
Operational restructuring efforts persisted through workforce reductions; by the end of 2025, EPS employed fewer than 19,000 individuals following the departure of over 1,400 workers through early retirement programs.
For Serbia’s broader energy landscape, EPS’s results reflect a regional reality across Southeast Europe where coal remains central both financially and operationally despite accelerating renewable investments. While profits increased in 2025, they continued to hinge on stable lignite production and improved coal mining outputs rather than on genuine structural decarbonization.
This contradiction is becoming increasingly apparent as Serbia positions itself as a potential regional hub for solar energy, battery storage solutions, and grid modernization while simultaneously depending on coal for over two-thirds of its electricity generation and delaying portions of its flagship renewable initiatives. As EPS enters into the year 2026 with stronger financial standing compared to previous crisis years, it still confronts significant challenges transitioning from emergency stabilization towards long-term portfolio transformation.
