A 2025 energy-sector assessment says Serbia’s electricity system has recovered from severe operational problems earlier in the decade, but structural exposure remains. Continued reliance on lignite, rising infrastructure costs, and slow diversification are cited as factors that could leave the sector vulnerable to further shocks. The assessment links these risks to the generation mix and the pace of change in supply.
Generation mix and shifting demand patterns
In 2025, lignite accounted for around 70% of Serbian electricity generation, while hydropower supplied roughly 26%. Wind reached around 3.8%, rising sharply from negligible levels in 2017, and solar continued to expand from a relatively small base. The assessment notes that the current generation structure is becoming less aligned with changing demand patterns.
It points to growing summer electricity consumption alongside the traditional winter peak. This shift strengthens the case for faster deployment of solar, wind, storage and other flexible resources. The assessment frames these needs as part of how Serbia’s system must respond to demand changes.
Role of EPS across the power chain
State power utility EPS is described as central to system stability because operational and fuel-supply problems can affect the wider electricity chain. This includes transmission operator EMS and distributor EDS. The assessment says disruptions at utility level can therefore propagate beyond generation.
EPS is relying heavily on development of the Radljevo lignite mine to reduce coal imports. However, continued dependence on imported lignite raises questions about how quickly Serbia can transition away from coal.
Investment risks: infrastructure costs and project overruns
The period to 2030 is identified as critical for maintaining a credible path toward a largely decarbonised electricity sector by 2050. Project costs are also highlighted as a major risk in the same timeframe. Estimates for the Bistrica pumped-storage hydropower plant have risen by about 15%.
Kostolac B3 was completed at roughly 18% above planned cost, while projected costs for Djerdap 3 have increased by as much as 85%. The assessment presents these figures as evidence that capital spending pressures are materialising across major projects.
Carbon pricing pressure and nuclear timing
The EU Carbon Border Adjustment Mechanism is described as adding pressure to coal-based exports. Around 600 MW of offers have reportedly disappeared from the power exchange as carbon-intensive electricity becomes less competitive in the European Union. The assessment treats this as part of the broader market conditions affecting coal generation.
Nuclear generation is described as unlikely to provide a near-term solution. Serbia is not expected to commission a nuclear plant before around 2040 even under favourable conditions. In this context, the assessment links near-term system planning to non-nuclear options.
Flexibility priorities for the rest of the decade
The assessment says coal exposure, rising capital costs, and increasingly volatile demand make investment in flexible generation and storage central to Serbia’s power-sector strategy over the remainder of the decade. It connects these priorities to changes in demand patterns already affecting seasonal consumption. The focus remains on resources intended to support system flexibility.
