Serbia’s electricity system has recovered from severe operational problems earlier in the decade, but continued dependence on lignite, rising infrastructure costs and slow diversification leave the sector exposed to further shocks, according to a 2025 energy-sector assessment.
Lignite accounted for around 70% of Serbian electricity generation in 2025, while hydropower supplied roughly 26%. Wind reached around 3.8%, up sharply from negligible levels in 2017, while solar continued to expand from a relatively small base.
The generation structure is becoming less suited to changing demand patterns as summer electricity consumption grows alongside the traditional winter peak, strengthening the case for faster deployment of solar, wind, storage and other flexible resources.
State power utility EPS remains central to system stability because operational and fuel-supply problems can affect the wider electricity chain, including transmission operator EMS and distributor EDS.
EPS is relying heavily on development of the Radljevo lignite mine to reduce coal imports, although continued dependence on imported lignite raises questions over the pace of Serbia’s transition away from coal.
The period to 2030 will be critical if Serbia is to maintain a credible path towards a largely decarbonised electricity sector by 2050.
Project costs are also emerging as a major risk. 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 EU Carbon Border Adjustment Mechanism is adding further 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.
Nuclear generation is unlikely to provide a near-term solution, with Serbia not expected to be able to commission a nuclear plant before around 2040 even under favourable conditions.
The combination of coal exposure, rising capital costs and increasingly volatile demand makes investment in flexible generation and storage central to Serbia’s power-sector strategy over the remainder of the decade.
