Serbia produces 70% of its electricity from coal and 30% from hydropower, with the remainder coming from wind and solar. Despite government plans to transition to green energy solutions and reduce reliance on Russian gas, the transition is expected to be long and costly. The Ministry of Mining and Energy has announced a €7 billion investment plan for the electricity and mining sectors, with the bulk of it intended for new hydropower capacity. Serbia aims to modernize its coal-burning power plants, increase its use of renewable sources, and improve energy efficiency. The main players and investors in the Serbian energy sector include Elektroprivreda Srbije (EPS), Srbijagas, and various renewable energy companies. Serbia needs to install 5,000 GWh of new generating capacity per year, with a substantial portion coming from renewable energy, in order to meet EU accession-related requirements and commitments under the Energy Community Treaty and the Paris Agreement.
The Serbian government has set a target to reach a 40 percent share of renewables in the country's electricity mix by 2040, and there are opportunities for foreign companies to participate in the development of Serbia's renewable energy sector.
The government has already taken steps to create a more favorable regulatory environment for renewable energy, including the adoption of new laws and regulations to promote renewable energy and energy efficiency. In addition, the government has established a feed-in tariff program to incentivize the development of new renewable energy projects and has announced plans to introduce auction-based trading in renewable energy.
Foreign companies can also participate in Serbia's efforts to increase its energy efficiency. The government has established a fund to support energy-efficiency projects at the local level, and the EU has announced funds to support energy efficiency upgrades for industry and consumers.
There are also opportunities for foreign companies to participate in the modernization of Serbia's existing coal-burning power plants. Serbia is currently investing in environmental upgrades for its coal-fired power plants, and there are plans to continue this investment over the next ten years. Foreign companies with expertise in environmental technologies and equipment could potentially participate in these projects.
Overall, the Serbian energy sector presents opportunities for foreign companies with expertise in renewable energy, energy efficiency, and environmental technologies. As the country seeks to reduce its dependence on coal and increase the share of renewables in its energy mix, there will be significant demand for new investment in the sector.
In addition to the domestic market, there may also be opportunities for foreign companies to participate in Serbia's energy sector. The Serbian government has implemented various measures to attract foreign investors, including tax incentives, simplified procedures for obtaining permits and licenses, and a transparent regulatory framework.
Serbia is also strategically located at the crossroads of major energy routes, making it an important transit country for energy exports to other parts of Europe. For example, the TurkStream pipeline, which delivers Russian natural gas to Turkey and other parts of Europe, passes through Serbia. The planned IBS interconnector, which will link Bulgaria and Serbia, is also part of a larger plan to connect the natural gas networks of Southeast Europe.
Overall, the energy sector in Serbia is undergoing a significant transformation as the country seeks to reduce its reliance on fossil fuels and increase its use of renewable energy sources. While there are significant challenges to this transition, including the need for significant investment and modernization of the energy infrastructure, there are also significant opportunities for companies to participate in this process and help shape the future of Serbia's energy landscape.