Serbia is close to establishing a joint venture with Azerbaijan’s SOCAR to develop a gas-fired combined heat and power plant with planned capacity of up to 500 MW.
Representatives of Serbia’s Ministry of Mining and Energy, state power utility EPS, gas company Srbijagas and SOCAR have completed negotiations on a shareholder agreement, which is expected to be signed in Belgrade within the next month.
The new company would bring EPS, Srbijagas and SOCAR into a common structure responsible for financing, developing and building the facility, marking the first joint investment involving all three companies.
The plant would produce electricity and usable heat from natural gas. With capacity of up to 500 MW, it would add a significant source of dispatchable generation to Serbia’s system and could support balancing during periods of weak wind and solar production.
Authorities expect development and construction to take around four years once the project moves into implementation.
The investment would broaden the energy relationship between Serbia and Azerbaijan, which has so far focused mainly on gas supply and associated infrastructure, into large-scale electricity generation.
For Serbia, the project would also add flexible thermal capacity at a time when increasing renewable penetration is raising demand for balancing resources, although its long-term economics will remain exposed to natural-gas prices, carbon costs and the pace of electricity-market decarbonisation.
