Plans for a significant gas-fired power plant near Niš, Serbia, are advancing as the governments of Serbia and Azerbaijan collaborate on this strategic energy project. Construction is projected to commence in 2027, with an anticipated installed capacity of around 500 MW.
This initiative extends beyond merely establishing a new thermal power facility. It signifies a substantial shift in Serbia’s energy landscape, integrating electricity generation, gas diversification, district heating capabilities, and regional energy security within a single investment framework. Energy analysts from Serbian public broadcaster RTS estimate that the new plant could produce between 2 and 3 TWh annually, which would account for approximately 10% of Serbia’s current electricity output.
The proposed facility is expected to operate as a combined-cycle gas turbine (CCGT) plant, providing essential baseload and balancing capacity in response to Serbia’s increasing reliance on renewable energy sources. Unlike solar and wind energy, gas-fired generation can offer flexibility that stabilizes grid frequency and accommodates intermittent renewable inputs.
As Serbia enhances its utility-scale solar and wind projects while dealing with aging coal infrastructure and rising electricity demands from industrial growth and data centers, the balancing function of this gas-fired plant becomes increasingly vital. Serbian Energy Minister Dubravka Đedović Handanović has indicated that the facility could partially replace thermal coal generation while facilitating the integration of renewable energy into the national grid.
In addition to electricity generation, the project may also serve a crucial role in providing district heating for households in Niš, thereby creating a dual-function energy hub in southern Serbia.
However, securing a reliable gas supply remains a central concern. Currently, Serbia imports Azerbaijani gas through the Bulgaria-Serbia interconnector, which became operational in late 2023. The existing import volumes are inadequate to support a large-scale gas-fired power plant fully.
Analysts anticipate that the Niš project will lead to expanded negotiations regarding Azerbaijani gas deliveries, additional transport capacity, and potential long-term supply agreements involving SOCAR, Srbijagas, and EPS. The future plant is projected to require about 600 million cubic meters of gas annually—significantly more than Serbia’s current Azerbaijani supply arrangements.
The geopolitical context is particularly relevant. Azerbaijan aims to boost its gas exports to the European Union by 2027, positioning itself as an alternative supplier amid Europe’s efforts to reduce reliance on Russian gas supplies. Concurrently, Serbia seeks to diversify its energy supply channels while managing uncertainties related to the ownership and sanction implications surrounding NIS.
Ownership of the project is expected to reflect its strategic importance, with both Serbia and Azerbaijan likely holding 50% stakes in the plant through collaboration involving EPS, Srbijagas, and SOCAR.
Financial estimates for this investment range around €600 million, marking it as one of Serbia’s largest planned energy infrastructure projects outside the renewable sector. This initiative also highlights a broader regional trend in Southeast Europe where governments promote renewables while simultaneously recognizing gas-fired generation as a transitional technology critical for maintaining grid reliability amid increasing solar and wind integration.
In the Western Balkans, gas generation is increasingly seen not only as a substitute for coal but also as an essential infrastructure component supporting industrial competitiveness and electricity security. The Niš project is poised to play a significant role within this evolving regional energy framework.
