Serbia’s renewable-energy sector has warned that recent grid regulations could delay a new investment cycle for at least four years, affecting more than 1.15 GW of planned wind and solar capacity. The Renewable Energy Sources of Serbia Association (OIE Srbija) has submitted proposals to the Ministry of Mining and Energy seeking changes to electricity-supply regulations and provisions of the Energy Law.
Under recent regulatory changes, preparation of grid-connection studies for variable renewable-energy projects has been postponed until the fourth quarter of 2029. The studies determine whether and under which conditions a power plant can connect to the transmission network.
More than 1.15 GW of projects affected
Projects that already have connection studies are also facing delays involving planning authorities, permitting institutions and the application of construction legislation.
Information collected by OIE Srbija from its members indicates that projects with combined capacity exceeding 1.15 GW are exposed to these delays.
Developers have also provided approximately €29 million in bank guarantees to Serbia’s transmission-system operator under the newer connection procedure. The guarantees tie up credit capacity and liquidity while some delays are attributed to public authorities. OIE Srbija has not disclosed the exact breakdown between solar and wind projects or identified all sponsors. Based on indicative regional development costs, the affected pipeline could correspond to approximately €800 million to €1.4 billion in potential capital expenditure, depending on the technology mix, grid requirements and storage.
Solar and wind investment profiles differ
An illustrative portfolio with 70% solar and 30% wind would comprise about 805 MW of solar and 345 MW of wind. Using indicative construction costs of €600,000–€750,000 per MW for utility-scale solar and €1.25 million–€1.55 million per MW for onshore wind, the combined investment would amount to approximately €915 million to €1.14 billion, excluding major transmission reinforcement.
A portfolio split equally between solar and wind would require approximately €1.06 billion to €1.32 billion. Solar projects generally have lower construction costs and shorter construction periods, while wind developments require higher capital expenditure, longer development periods and more extensive environmental studies. A utility-scale solar project in Serbia may achieve a capacity factor of approximately 14–17%, compared with around 28–38% for a well-sited onshore wind farm.
Financing exposure increases with delays
Annual operating expenditure for solar projects is typically equivalent to about 1.2–1.8% of initial CAPEX, while wind projects can reach 2.5–3.5%, reflecting turbine maintenance, component replacement and access requirements. Under current regional financing conditions, commercially viable solar projects with secure grid access and long-term offtake could target levered equity returns of around 9–12%, while wind projects may require approximately 10–14%, depending on resource quality, turbine procurement, balancing exposure and power-purchase agreement terms.
A 12–18 month delay can reduce equity IRR by approximately 1.5–3 percentage points, depending on leverage and whether construction has begun. Deferred electricity sales, additional development costs, higher capitalised interest and extended land, equipment and bank-guarantee arrangements contribute to the impact. Projects operating under short-dated permits or fixed-price supply contracts also face potential changes in turbine, transformer and cable costs, while equipment reservations may expire. Developers could also lose contracted grid capacity or have to repeat technical studies under revised network assumptions.
Grid congestion and curtailment remain key issues
Curtailment presents another financial variable. A sustained 5% reduction in saleable output could lower solar equity returns by roughly 0.7–1.2 percentage points and wind returns by about 0.5–0.9 points, depending on market prices during curtailed periods. Solar generation is more exposed to simultaneous output and midday price cannibalisation, while wind production is distributed across a broader part of the day and year.
Serbia’s transmission and distribution networks are processing a significant volume of connection requests. The issue therefore extends beyond adding renewable capacity to determining which projects are technically mature, financially credible and compatible with planned network reinforcement. Bank guarantees were introduced partly to discourage speculative applications that reserve grid capacity without a realistic construction plan. OIE Srbija argues that the current framework can also expose credible developers to delays outside their control.
Storage cannot replace unavailable grid studies
A prolonged pause until late 2029 could result in projects progressing simultaneously once the connection process reopens, rather than advancing alongside network upgrades. The regulatory issue comes as Serbia faces increasing electricity demand and the gradual retirement or reduced availability of ageing coal-generation assets. Additional wind and solar capacity could reduce exposure to imported electricity and fuel prices, but replacing dispatchable generation requires storage, flexible thermal or hydro capacity, stronger regional interconnection and demand management.
Battery storage could help shift solar production away from periods of grid congestion. However, storage projects require rules governing connection rights, network charging, market participation and balancing responsibility.
OIE Srbija seeks regulatory changes
OIE Srbija has called on the government to protect projects delayed by public authorities, revise the May 2026 regulation and establish a route for new connection studies before 2029. The association has submitted proposed amendments covering both the relevant regulation and the Energy Law. The financial exposure extends beyond the €29 million in bank guarantees, as developers have also committed capital to land rights, measurements, environmental studies, engineering and permits.
