Serbia is advancing plans for a major gas-fired power plant near Niš, with a proposed electricity generation capacity of 350–500 MW, as state energy companies seek to expand domestic generation and strengthen electricity supply security. The planned combined-cycle facility would occupy approximately 68.75 hectares near Lalinac and Krušce, on the left bank of the Južna Morava River, according to planning documentation opened for public consultation.
In addition to electricity generation, the project предусматриes approximately 150 MW of useful thermal capacity for Niš’s district-heating network. Combined electricity and heat output would therefore reach 500–650 MW.
The development involves Serbian state-owned companies Elektroprivreda Srbije (EPS) and Srbijagas, alongside Azerbaijan’s SOCAR. The partners signed a shareholders’ agreement on September 30, establishing the framework for a joint venture in which the two Serbian companies collectively hold 50%, while SOCAR owns the remaining 50%. Construction is targeted for completion by 2030. The partners have not publicly finalised the total investment value, financing arrangements or commercial structure.
Combined-Cycle Generation and Electricity Market Conditions
The proposed investment is progressing amid increased volatility in regional electricity markets, strengthening the importance of additional domestic generation capacity.
Serbia’s wholesale electricity prices on the SEEPEX day-ahead market averaged €234.31/MWh in October, representing an increase of more than 56% compared with September. The higher prices have highlighted the exposure of electricity consumers and suppliers to regional supply constraints.
A combined-cycle gas-fired facility would provide controllable electricity generation, allowing output to be adjusted according to market demand and available supply. Its operational flexibility could also complement the expansion of wind and solar generation in Serbia’s electricity system.
The project’s commercial performance will depend on several factors, including construction expenditure, natural gas procurement costs, generation efficiency and annual operating hours. Revenue from electricity sales and heat supplied to Niš’s district-heating system will also influence its financial viability.
Gas Supply, Grid Infrastructure and Environmental Requirements
The proposed power station will require dependable natural gas deliveries, connection to Serbia’s high-voltage electricity transmission network and infrastructure for industrial water supply and wastewater discharge.
The planning process also предусматриes a strategic environmental assessment as the project advances through the relevant development stages.
SOCAR’s involvement establishes a framework for energy cooperation between Serbia and Azerbaijan through shared ownership of the proposed facility. The company’s equity participation does not determine the terms of potential gas deliveries, including supply volumes, prices or contract duration. The financing structure remains another major outstanding issue, given the substantial capital requirements associated with the construction of modern combined-cycle power plants.
Project Development and Outstanding Investment Decisions
The proposed facility could increase electricity generation capacity in southern Serbia while providing an additional source of heat for Niš’s district-heating system. Its development is also linked to the country’s efforts to support industrial activity through more reliable energy supplies. The planning documentation and shareholders’ agreement do not constitute a final investment decision or confirmation that construction financing has been secured.
Further development will require feasibility studies, arrangements for connection to the electricity grid, natural gas supply agreements, environmental approvals and agreement among the shareholders on the project’s financing structure.
The investment’s progression towards its targeted 2030 completion will depend on the resolution of these technical, regulatory, commercial and financial requirements.
