Elektroprivreda Srbije (EPS) reported significant financial improvements for the year 2025, marking a recovery from the operational and financial challenges that followed the 2021 crisis at the TENT thermal power complex. The company achieved a net profit estimated between RSD 38.7 billion and RSD 42.3 billion (approximately EUR 330–360 million), a notable increase from the previous year’s profit of around RSD 24–26 billion. However, this figure remains considerably lower than the exceptional earnings recorded in 2023, when favorable hydrological conditions and high regional electricity prices allowed EPS to approach EUR 1 billion in profits.
Despite these gains, EPS’s production structure highlights an ongoing reliance on lignite for electricity generation. In 2025, coal-fired thermal plants contributed roughly 71.4% of total electricity output, while hydropower and renewable sources accounted for about 27.3%. The company’s dependence on coal became particularly evident during a year characterized by weak hydrological conditions, which saw hydroelectric output decline by approximately 20% compared to the previous year, falling to around 8.3 TWh from over 10 TWh in 2024 and about 12.6 TWh in 2023.
Coal production at EPS improved, with approximately 32.8 million tonnes mined in 2025, surpassing both the previous year’s figures and those from 2023. This increase reflects ongoing efforts to stabilize the Kolubara mining system after years of underinvestment and operational issues. Additionally, EPS managed to lower external coal procurement costs compared to prior years, which positively impacted profitability.
However, the recovery appears more defensive than transformative. Reports indicate that electricity exports dropped significantly in 2025, nearly halving from previous levels. This reduction suggests that EPS had less surplus electricity available for regional markets, contrasting sharply with the record profitability experienced in 2023 that benefitted from robust export opportunities during high price periods.
In parallel, EPS continued incurring substantial expenses related to purchasing electricity from external markets and balancing costs. Procurement expenses reportedly rose to around RSD 185 billion, up from RSD 167 billion in the previous year. This trend underscores Serbia’s exposure to regional market fluctuations despite improvements in domestic coal production.
Investment activities within EPS also reveal underlying tensions related to Serbia’s energy transition strategy. Total investments in 2025 reached approximately RSD 52.7 billion, falling short of planned targets and below the execution levels of 2024. A key factor was the postponement of a strategic solar plus battery storage project intended to support Serbia’s renewable energy initiatives; implementation has been delayed until 2026 due to complexities associated with preparatory work.
This delay has significant implications as the Hyundai Engineering–UGT Renewables project is poised to play a crucial role in expanding Serbia’s utility-scale renewable capacity and enhancing long-term energy flexibility. Without expedited deployment of large-scale solar and battery systems, Serbia’s energy framework remains heavily reliant on aging coal infrastructure, particularly during years marked by low hydrological output.
Financially, EPS continues to grapple with substantial long-term liabilities estimated at around RSD 151.3 billion (nearly EUR 1.3 billion), linked to financing from international lenders including the European Bank for Reconstruction and Development (EBRD) and various Japanese and Chinese institutions. Despite improved financial results, EPS faces multiple challenges: ensuring reliability of its thermal fleet, financing necessary transition investments, stabilizing mining operations, and managing politically sensitive electricity tariffs.
Operational restructuring is also ongoing; by the end of 2025, EPS had reduced its workforce to fewer than 19,000 employees following the departure of over 1,400 workers through early retirement schemes.
The financial results from EPS highlight broader trends within Southeast Europe’s energy market: coal remains a critical component despite accelerating investments in renewables. While EPS achieved stronger profits in 2025, these gains were largely contingent on stable lignite production and improved coal mining output rather than any significant progress toward decarbonization.
This duality is becoming increasingly apparent as Serbia aims to establish itself as a future hub for solar energy, battery storage solutions, and grid modernization while still depending on coal for more than two-thirds of its electricity generation and delaying key renewable projects. As EPS approaches 2026 with a stronger financial footing than during past crises, it must navigate the challenging transition from emergency stabilization toward a comprehensive transformation of its energy portfolio.
