The ongoing evolution of Serbia’s power sector is marked by a critical examination of flagship projects aimed at enhancing system flexibility and security. The EPS power utility has identified reversible hydropower and gas-fired generation as strategic solutions to address significant system weaknesses. However, despite years of planning and feasibility studies, these projects remain largely unexecuted, confined to theoretical discussions rather than actionable developments.
The reversible hydropower plant Bistrica exemplifies this dilemma. With an anticipated capacity of 600–700 MW and the ability to store energy for 8–10 hours, Bistrica is positioned as a vital component for balancing Serbia’s energy system, particularly as renewable energy sources like wind and solar become more prevalent. Initial capital expenditure estimates range from €900 million to €1.2 billion, reflecting the substantial investment required for civil works and grid integration.
Feasibility studies have consistently highlighted Bistrica’s potential to mitigate curtailment risks, support peak shaving, stabilize frequency, and reduce import dependency during critical periods. However, the financial viability of the project remains uncertain due to the lack of a mature capacity or flexibility market in Serbia. This uncertainty complicates EPS’s ability to secure predictable revenue streams necessary for such a capital-intensive project, leading to a cycle of repeated feasibility assessments without decisive action.
Similarly, EPS has announced various gas-fired generation projects over the past decade, typically in the 300–500 MW range, with estimated capital costs between €250 million and €400 million. These plants are viewed as transitional assets that could provide essential backup for renewables while phasing out aging lignite units. Yet again, structural challenges hinder progress. Uncertain long-term gas supply pricing and a predominantly merchant power offtake model create significant risks for EPS in committing to these projects.
The core issue linking Bistrica and the proposed gas plants is their role as flexibility assets that provide collective value to the energy system but lack direct monetization pathways. While feasibility studies quantify potential savings from reduced imports and improved reliability—estimated at €50–100 million annually—these benefits do not translate into guaranteed revenue for EPS. As a result, the financial burden rests heavily on EPS’s balance sheet without corresponding compensation from consumers or the state.
This situation presents a complex institutional challenge. EPS is expected to operate commercially while also fulfilling national energy security and transition goals. Approving large-scale investments in Bistrica or gas plants would require EPS to commit substantial capital without assured revenue streams, creating a precarious balancing act between strategic alignment with government policy and financial prudence.
Moreover, both reversible hydropower and gas plants would only become viable investments once market reforms are enacted—such as capacity remuneration mechanisms or explicit state support frameworks. In Serbia, discussions surrounding these reforms often occur concurrently with project evaluations, resulting in a stagnation where feasibility studies serve as placeholders rather than pathways to implementation.
Ultimately, Bistrica and gas power plants reflect broader systemic issues within EPS’s approach to project development. The ongoing reliance on feasibility assessments underscores a reluctance to confront long-term risks within an environment that disperses responsibility and shortens decision-making horizons.
The pressing need for large-scale storage solutions and flexible thermal backup is evident as coal units age and renewable energy penetration increases. Without decisive action on these flagship projects, Serbia’s energy system may face escalating reliance on imports and emergency measures. Until clear mechanisms for compensating flexibility are established—whether through tariffs or direct state support—Bistrica and associated gas projects will likely remain theoretical constructs rather than operational realities.
