For nearly two decades, Serbia carried a self-image that shaped politics, strategy and public psychology: the idea that it was a structurally self-sufficient electricity country, often even a net exporter, supposedly shielded from the fragility, price shocks and insecurity faced by others. This belief was not invented; it reflected a period when lignite production was stable, hydropower cycles were favorable, demand growth was moderate and regional dynamics allowed Serbia to supply neighbors while maintaining low domestic tariffs. That legacy memory still shapes much of Serbia’s political discourse and even some strategic planning in 2025. But the reality that investors and financial analysts must confront is less nostalgic and far more structural.
The question is simple but decisive: can Serbia realistically return to the status of a permanent and stable power exporter, or has the market already structurally erased that possibility?
To answer it honestly, we have to strip away the historic narrative and look at fundamentals as investors do — not through emotion or national identity, but through capacity, cost structure, system risk, and price positioning within a competitive regional environment.
Serbia in 2025 is projected to produce approximately 38.5 TWh of electricity. Around 24.2 TWh of that comes from lignite. Close to 10 TWh comes from hydropower. The rest is a modest combination of gas-fired output, wind, solar and other minor contributions. Imports and exports together form a roughly 11.8 TWh combined external flow, with Serbia expected to be slightly net export positive, perhaps in the range of half a terawatt-hour. On the surface, this might look like a country broadly in balance, slightly leaning toward surplus. But balance is not the same as structural export capability. Surplus achieved occasionally, under favorable conditions, does not equal export status. A country can only call itself a permanent exporter if it has stable, predictable, resilient generation capacity that consistently exceeds consumption under most plausible conditions.
Serbia does not currently have that.
The first constraint is lignite. It remains the backbone, but increasingly a brittle backbone. Coal dominated Serbia’s power system because it was domestic, supposedly cheap and controllable. In 2025, none of those assumptions fully withstand scrutiny. Serbia’s lignite mines require expensive maintenance, resource quality is not improving, and excavation and delivery chains are increasingly exposed to operational disruptions. Thermal power plants are aging assets operating in a high-stress regime. Breakdowns are not anomalies; they are expected events. Every lost unit of coal output forces Serbia into the regional market, and the regional market charges reality, not nostalgia. To be a permanent exporter, Serbia would need coal capacity capable of reliably sustaining excess production far beyond domestic needs — and structurally, it simply does not have that kind of stability.
The second constraint is hydrology. For much of its modern history, Serbia could rely on hydro generation as a corrective force, smoothing shocks and providing export potential in favorable years. But hydropower stability is now an illusion. Climate volatility has fundamentally altered rainfall behavior, river levels and seasonal predictability. Serbia has already experienced multi-year periods where hydrology significantly underperformed expectations. In 2025, hydropower production sits in the 9–10 TWh region under planning assumptions — but those numbers remain assumptions, not guarantees. If Serbia’s ability to export depends heavily on “good water years,” then Serbia is not a structural exporter. It is a conditional exporter, dependent on weather luck rather than system strength. No serious investor treats weather dependency as a basis for reliable export positioning.
The third constraint is demand evolution. Serbia’s economy, even under moderate growth conditions, will not consume less electricity in the future. Electrification trends, industrial restructuring, urbanization patterns, digital economy expansion and electric heating development all work in the same direction: pressure on consumption gradually rising, even if not explosively. A country aspiring to export electricity long-term must not only have reliable surplus today but must project credible surplus into the 2030s. Without major generation expansion and modernization, Serbia’s structural headroom shrinks, not expands.
The fourth constraint is the financial logic imposed by European energy reality. Even if Serbia could physically generate more electricity, the cost environment in which it operates is no longer the cheap Balkan island it once was. Serbia’s wholesale electricity pricing is increasingly tied to European fundamentals: fuel costs, carbon pricing, regional supply tightness and cross-border price formation. Exporting in a region where prices remain elevated is useful — but only if your cost base allows sustained margin. EPS continues to bear rising OPEX, maintenance stress, capital needs and risk premiums due to volatility and infrastructure age. Being a permanent exporter implies having durable margin strength. Serbia currently has episodic pricing advantage, not embedded margin stability.
So where does this leave EPS and Serbia’s broader political narrative?
EPS remains capable of generating export volumes. The fact that Serbia is projected to export over 6 TWh in 2025 proves that. The problem is not the absence of export ability; the problem is consistency and reliability. EPS’s financials illustrate this vulnerability. A €234 million profit in the first half of 2025 is a sign of resilience — but it is also a reminder that profitability remains thin relative to risk exposure. A few adverse hydrological cycles, compounded by coal unit instability and unfavorable regional prices, could rapidly erode that margin. No investor would define such a company as operating from structural export power. A confident exporter should possess resilience to shocks, not survive through tactical adaptation.
Even if Serbia were to stabilize coal and experience favorable hydrology periodically, the future export question still intersects with Europe’s energy transition trajectory. Serbia can theoretically ignore decarbonization politically for some time. Financial markets cannot. Lignite assets will increasingly face financing restrictions, rising cost of capital, insurance tensions, reputational risk and eventually, regulation convergence pressure. A power export model sitting on lignite in the 2030s is a deteriorating export model. Serbia therefore confronts a paradox: it cannot regain true exporter stability through coal, but it has not yet replaced coal with any alternative foundation strong enough to support sustained surplus.
Renewables help, but not yet at the scale or controllability needed to fully anchor export identity. Wind and solar in Serbia will eventually deliver meaningful structural contribution. They will diversify portfolio exposure, reduce import vulnerability, enhance flexibility and potentially create surplus in favorable production windows. But they are intermittent. Export strategy cannot be built on assets that cannot guarantee output when demand calls. Renewables turn Serbia into a smarter system; they do not automatically turn Serbia back into a permanent exporter.
Could baseload-replacement strategies change that? Potentially yes, but only if Serbia engages in major investment cycles: large hydropower expansions, pumped storage, modern flexible gas capacity with long-term diversification strategy, and grid reinforcement enabling deep integration with the region. That would require billions in CAPEX, disciplined governance, investor credibility, and long-horizon policy clarity. None of that currently exists at required scale. Until it does, the idea of Serbia re-emerging as a powerful, permanent exporter remains aspirational branding, not grounded forecast.
The regional environment further complicates matters. Serbia is surrounded by competitors, not empty demand. Romania is expanding renewables and strengthening nuclear capacity. Bulgaria remains anchored by nuclear and growing renewable penetration. Greece is rapidly expanding renewables and interconnection strategy. Croatia leverages hydro. Hungary stands as a trading powerhouse with forward-positioned infrastructure. The Balkans are no longer energy backwaters. They are evolving markets. Serbia’s exports will therefore increasingly compete against structurally improving neighbors, many of whom operate with clearer financing pipelines and EU-aligned transition support. This weakens the likelihood of Serbia dominating regional exports as it once did.
So can Serbia ever again be a structural net exporter of electricity year after year, with reliability and strategic confidence?
Yes — but only in theory. Practically, not under current conditions.
Serbia would need to stabilize coal beyond what aging plants realistically allow, or replace it decisively with a modern alternative that does not yet exist. It would need hydrology certainty that climate dynamics cannot provide. It would need investment discipline it has not yet demonstrated consistently. And it would need to operate with European-level market sophistication continuously, not occasionally.
In reality, the market has already answered: Serbia is now a hybrid electricity country. Sometimes an exporter, often an importer, always a trader. Exporting will remain a recurring event. Permanent export identity will remain a memory unless the country executes a radical transformation of its generation base.
For investors and financial analysts, this answer is not disappointing — it is clarifying. A Serbia that lives permanently in the space between import and export is not a failure; it is a market. It creates trading opportunity, demand for storage and flexibility investments, room for PPA development, infrastructure modernization potential and portfolio balancing plays. Serbia’s value is not that it is permanently strong. Its value is that it is evolving, liquid, integrated and necessary within a volatile region.
The key is accepting reality. Serbia cannot sell itself credibly as the Balkan electricity giant of old. It can, however, position itself as a credible, disciplined, strategically modernizing energy market capable of attracting investment, reducing volatility risk and leveraging interdependence intelligently.
Permanent exporters live in history. Smart market economies live in reality. Serbia in 2025 is finally moving from the first category toward the second — and investors will reward that shift far more than they would reward empty nostalgia.