Serbia is entering its largest energy-investment cycle in decades, but the financial logic of new capacity is being altered by carbon costs, negative wholesale prices and grid constraints.
The government envisages approximately €14.4 billion of energy investment between 2028 and 2035. Around €6.5 billion would be allocated to generation, €2.4 billion to transmission and distribution, €1.2 billion to gas interconnections and €1.2 billion to oil pipelines.
The most advanced renewable developments already demonstrate the growing role of foreign capital. SANY Renewable Energy has started construction of the 168 MW Alibunar A and B wind portfolio, requiring approximately €240 million. The projects will use 40 turbines and are expected to generate around 480 GWh annually. Approximately 70%of capacity secured market-premium support through Serbia’s renewable auction.
The Hyundai Engineering–UGT Renewables programme will deliver 1.2 GWp of solar, 1 GW of connection capacityand 200 MW/400 MWh of battery storage before transfer to EPS. South Korea’s K-Sure is providing approximately €900 million in export financing. Expected annual production is around 1.5 TWh.
At Niš, EPS and Azerbaijan’s SOCAR are negotiating a joint venture for a gas-fired power plant targeted for completion by 2030. The project would give SOCAR a position beyond commodity supply and into Serbian electricity generation.
These investments face changing market economics. SEEPEX recorded a price of minus €45.50/MWh on June 7, with nine consecutive negative hours. The estimated solar capture price fell to only €1.70/MWh, compared with a daily baseload average of €52.20/MWh. Indicative arbitrage spreads reached €163.60/MWh for two-hour batteries and €151.50/MWh for four-hour systems, demonstrating both the need for storage and the volatility of merchant revenue.
CBAM creates a separate pressure on coal-intensive EPS. Management estimates approximately €150 million of lost revenue from constrained EU electricity exports, while Serbia’s domestic carbon charge of €4 per tonne could cost EPS around €100 million on emissions of 25 million tonnes. The domestic levy remains far below the EU ETS price, limiting the protection it can provide against CBAM liabilities.
The investment programme is large enough to transform Serbia’s generating fleet. Its returns will depend on transmission completion, storage deployment, wind and solar capture prices, carbon exposure and the ability of EPS to implement operational restructuring without weakening project delivery.