From the 1950s to the 1990s, the generations that built and worked laid down strong energy foundations, enabling us to avoid significant investments in this sector for over 30 years. However, the dwindling supply of coal and the growing global demand to shift to renewable energy due to increasingly visible climate changes are placing Serbia under serious scrutiny.
In the next 25 to 30 years, Serbia will have to replace its coal-based power plants, which currently have a capacity of about 4,000 megawatts. This will require a fundamental change in the energy fuel that has been used for decades.
Failing to adapt could result in substantial penalties for using “dirty” energy, as well as possible restrictions or even cold radiators. Regarding past investments, Serbia, with the help of China, has successfully built a 350-megawatt block at the “Kostolac” thermal power plant, which has been connected to the grid this heating season. However, with the completion of this new block, investments in new thermal power plants and blocks are over. If Serbia adheres to its green agenda, this new thermal block will operate for 25 years, much shorter than the 50+ years of operation seen in older plants like the A1 and A2 blocks at the “Nikola Tesla” power plant.
According to the energy development strategy through 2040 and projections until 2050, Serbia is shifting towards renewable energy sources, which include the construction of hydroelectric plants. The two largest and most prioritized projects in this regard are the construction of the “Bistrica” Reversible Hydroelectric Power Plant (RHE) (628 megawatts) and the “Đerdap 3” Reversible Hydroelectric Power Plant (RHE) (1,800 megawatts).
These projects would secure stable electricity supply for Serbia and, thanks to the balancing capabilities of reversible hydroelectric plants, could also enable the growth of solar and wind power. The documentation preparation, feasibility studies, and financial structure for the “Bistrica” RHE are already underway, with Japan’s International Cooperation Agency (JICA) expressing interest in financing it. The project is expected to be completed by 2032, with an estimated construction cost of €1.1 billion.
The construction of the “Đerdap 3” RHE is still a longer-term endeavor, as Serbia cannot proceed without the consent of Romania, which has repeatedly indicated that the construction of “Đerdap 3” would reduce the power of existing hydropower plants on the Danube. The American company Bechtel is interested in constructing this plant. The target for “Đerdap 3” to be connected to the grid is 2040, with an estimated construction cost of €1.4 billion.
Although not widely publicized, the strategy also mentions plans to build hydroelectric plants on the Ibar (121 megawatts), on the Morava (146 megawatts), and to develop the Gornja Drina hydroelectric power system (212 megawatts). As for small hydroelectric plants, the development strategy indicates that there is no potential for building new ones.
Energy foundations laid by previous generations during the 1950s to the 1990s have enabled Serbia to avoid significant investments in the sector for over 30 years.
However, with the decreasing supply of coal and global demands for a swift transition to renewable energy due to the visible impacts of climate change, Serbia faces a serious test.
In the next 25 to 30 years, Serbia will need to replace approximately 4,000 megawatts of coal-fired power capacity, requiring a fundamental shift from the fuel that has powered the nation for decades.
Failure to meet this challenge could result in significant penalties for using “dirty” energy, as well as potential restrictions or cold radiators.
In terms of past investments, Serbia, with the help of China, has successfully built a 350-megawatt block at the “Kostolac” thermal power plant, which has been connected to the grid this heating season.
With the completion of this thermal block, investments in new thermal power plants and blocks are now concluded. If Serbia adheres to its green agenda, this new thermal block will operate for 25 years, which is much shorter than the operational life of previous blocks, such as A1 and A2 at the “Nikola Tesla” power plant, which have been running for over 50 years.
According to the energy development strategy through 2040 with projections to 2050, Serbia is shifting its focus towards renewable energy sources. This includes the construction of hydroelectric plants, with two major and priority state projects being the “Bistrica” Reversible Hydroelectric Power Plant (628 megawatts) and the “Đerdap 3” Reversible Hydroelectric Power Plant (1,800 megawatts).
These projects would ensure Serbia’s electricity supply and, thanks to reversible hydroelectric plants’ excellent energy-balancing capabilities, they would also allow for the growth of solar and wind power.
Documentation preparation, feasibility studies, and financial structuring for the “Bistrica” RHE are already in progress. Japan’s International Cooperation Agency (JICA) is interested in financing this project. The completion is expected in 2032, with a projected construction cost of €1.1 billion.
The construction of “Đerdap 3” is still in a more distant phase, as Serbia cannot build this hydroelectric plant without approval from Romania, which has expressed concerns that “Đerdap 3” could reduce the power of existing plants on the Danube. The American company Bechtel is interested in building this plant, and the goal is for “Đerdap 3” to be connected to the grid by 2040, with a current estimated construction cost of €1.4 billion.
While not publicly emphasized, the strategy mentions the construction of hydroelectric plants on the Ibar (121 megawatts), the Morava (146 megawatts), and the development of the Gornja Drina hydroelectric power system (212 megawatts).
Regarding small hydroelectric plants, the energy development strategy suggests there is no potential for new ones.
Serbia is also focusing on expanding gas-fired power plants, with plans to build two smaller ones in Novi Sad and Niš. Additionally, President Aleksandar Vučić recently announced that Serbia plans to build either two smaller or one larger gas-fired plant in Niš in cooperation with Azerbaijan.
Serbia currently has 11 wind farms with a total capacity of 607 megawatts, all of which are privately owned and primarily supply electricity to the domestic market, with some exports. However, thanks to recent renewable energy auctions held in 2023, EPS has secured contracts with auction winners, guaranteeing the right of first purchase for wind and solar electricity. This has added 450 megawatts to the grid, and in 2024, the second round of auctions is expected to bring another 425 megawatts.
The potential for wind farms in Serbia is immense. According to the strategy, the technical potential for wind power is about 10.75 gigawatts, which is significantly more than the current combined power capacity of all thermal, hydro, and other energy plants in Serbia, which stands at around 8 gigawatts.
The energy development strategy aims to generate 3.5 gigawatts from wind and solar power by 2030 and 10.97 gigawatts by 2040.
Currently, EPS is building a solar and a wind farm in Kostolac. The “Petka” solar plant, with a capacity of around 10 megawatts, is expected to connect to the grid in early 2025, and the “Kostolac” wind farm, with a capacity of 66 megawatts, is expected to be completed by mid-2025. EPS has also entered into an ambitious green project with a consortium of companies, including Hyundai Engineering and UGT Renewables, to build six self-balancing solar plants totaling 1 gigawatt, coupled with energy storage systems of 200 megawatts.
In 2024, a significant agreement was signed with the Chinese company Shanghai Fengling, which will build wind and solar power plants totaling 2 gigawatts in Bor, as well as a green hydrogen production facility with an annual capacity of around 30,000 tons. The total investment amounts to around €2 billion.
Gas and oil investments
Serbia has minimal gas and oil production and relies heavily on imports from other countries. In recent years, Serbia has connected to the Turkish Stream, receiving gas from Russia, which accounts for up to 90% of total gas consumption.
Through the construction of an interconnector with Bulgaria, Serbia now has the opportunity to purchase gas from Azerbaijan and LNG terminals in Greece. Azerbaijan gas is already arriving in Serbia this heating season. Serbia plans to continue expanding its sources of gas, having signed an agreement with Romania in 2024 to build a new gas pipeline. Additional gas supply from Romania is expected in the coming years.
Serbia also plans to expand gas storage facilities. The Banatski Dvor storage is currently being expanded from 450 million to 750 million cubic meters, and future expansion plans may raise the capacity to 1.5 billion cubic meters.
Serbia also aims to open new gas storage facilities in Vojvodina and central Serbia, with potential new sites mentioned in the strategy, including Itebej, Tilva and Ostrovo.
Oil and petroleum
The majority of Serbia’s oil is imported from Croatia via the Adriatic pipeline (JANAF), built during the SFRY era, and from Iraq and Kazakhstan.
After European sanctions disrupted the import of Russian oil via sea routes, Serbia decided to build an oil pipeline to Hungary, linking it to the Russian Druzhba pipeline. The memorandum for the construction of this pipeline was signed in June 2023, with an estimated cost of €157 million.
The new pipeline will run from Szazalombata-Alđe-Roske-Novi Sad, with a total length of 304 kilometers, potentially extending to Thessaloniki and Drach in Greece.
Additionally, Serbia plans to build new storage facilities for petroleum derivatives in Pančevo, Kovin, and Ledinci.
Expanding energy sources
Beyond hydroelectric, wind, solar and gas power plants, Serbia also plans to harness geothermal energy, biomass, biogas, hydrogen and expand the use of electric vehicles by 2050.
