The signing of basic cooperation terms between EPS and Azerbaijan’s state energy company SOCAR initiates work toward a new gas-fired power plant in Niš. The project is described as one of Serbia’s major energy investments for the coming decade. The agreement sets out the core commercial and organizational framework for cooperation between the two sides.
- Planned capacity, output and investment scale
- Role in Serbia’s generation needs and fuel supply
- Niš location and regional gas interconnections
- Azerbaijan gas volumes and expected annual consumption
- Flexibility requirements amid renewables expansion
- Industrial use cases and next steps toward commissioning
The terms include plans to establish a joint project structure responsible for development, construction, and future operation of the facility. This structure is intended to cover the full lifecycle of the plant from early-stage work through operational phases.
Planned capacity, output and investment scale
Current plans envisage an installation with up to 500 MW of installed electricity generation capacity. The same concept includes approximately 150 MW of thermal output. The project is positioned among the largest new thermal energy investments under consideration in Southeast Europe.
Investment estimates associated with earlier discussions have reached approximately €600 million. The figures are linked to the scale of the planned facility and its expected role in Serbia’s power system.
Role in Serbia’s generation needs and fuel supply
The project is presented as addressing multiple energy challenges in Serbia. Electricity demand is expected to rise in coming years due to industrial expansion, electrification trends, growth in digital infrastructure, and higher consumption from large energy-intensive facilities. At the same time, Serbia faces pressure to modernize an aging generation fleet while reducing reliance on older coal-based production assets.
The plant near Niš is planned as a combined-cycle gas facility. Combined-cycle technology uses both gas and steam turbines to increase energy output from fuel consumption, while also improving operational flexibility compared with conventional gas generation systems.
Niš location and regional gas interconnections
The choice of Niš is tied to the need for additional generation capacity in southern Serbia. The area has been described as requiring more capacity as industrial activity expands and electricity demand becomes more geographically diversified. The location is also linked to access to major gas infrastructure.
The facility would benefit from direct connection to the Serbia–Bulgaria gas interconnector and the Balkan Stream pipeline system. These connections are cited as supporting fuel supply security and aligning with Serbia’s diversification strategy away from excessive dependence on a single gas source.
Azerbaijan gas volumes and expected annual consumption
The cooperation also deepens energy ties between Serbia and Azerbaijan, which have expanded over recent years. Azerbaijani gas is described as an increasingly important component of Serbia’s diversification efforts following commissioning of new regional interconnection infrastructure. Existing supply agreements already provide significant volumes of Azerbaijani gas to the Serbian market.
Bilateral cooperation has expanded beyond gas supply into broader investment and infrastructure projects. Project discussions indicate that once fully operational, the future power plant could require approximately 600 million cubic meters of natural gas annually. This level would place it among the largest single industrial gas consumers in Serbia.
Flexibility requirements amid renewables expansion
The investment reflects operational needs across Southeast European power systems as renewable deployment accelerates. Grid operators increasingly require flexible generation to offset renewable intermittency, with gas-fired generation positioned as both electricity supply and an operational balancing mechanism for system stability.
This issue is described as relevant for Serbia, where large-scale solar, wind, and battery storage projects are being pursued alongside efforts to maintain security of supply during periods of renewable variability. In this context, the Niš gas project is presented as part of a wider transition strategy rather than a standalone thermal investment.
Industrial use cases and next steps toward commissioning
The project also includes industrial implications for southern Serbia’s economy. A stable new generation source could improve supply reliability for manufacturing facilities, logistics centers, and future industrial investments in the region. The thermal component may also support district heating integration and industrial heat supply applications.
The next phase will focus on finalizing commercial arrangements, ownership structures, financing mechanisms, and detailed technical specifications. Authorities have indicated commissioning is targeted around 2030, with timelines dependent on permitting, engineering development, financing structures, and construction execution.
