Elektroprivreda Srbije (EPS) today stands as the central pillar of Serbia’s energy system, emblematic of the transition from crisis-mode operations to stable, strategic utility performance underpinning macroeconomic stability, export earnings and industrial competitiveness. After the volatility of the early 2020s — characterised by deteriorating hydrology, rising import requirements and high European wholesale prices — EPS has stabilised operations, normalised its financial profile and reclaimed its role as a reliable domestic producer and a regional exporter. In 2024 EPS produced approximately 31.9 terawatt-hours (TWh) of electricity, down from 37.7 TWh in 2023 but still sufficient to meet Serbia’s gross consumption of roughly 33–34 TWh, with a modest net export position maintained in favourable months. By the first nine months of 2025, EPS’s aggregate output remained in line with medium-term historical averages, indicating operational normalisation rather than episodic volatility.
EPS’s generation mix reflects Serbia’s broader energy strategy, with roughly two-thirds from lignite-fired thermal generation and the remaining one-third from hydropower and a modest but growing solar portfolio. Coal assets remain the baseload backbone, delivering reliability and dispatchable capacity, while hydropower plants provide seasonal flexibility and peak energy support. Although hydrology remains inherently variable, EPS’s cascade hydro portfolio contributes an annual average of nearly 10 TWh in good water years, a material chunk of the utility’s flexibility margin.
On the export front, EPS has returned to a structural net-export position after the import-heavy years dominated by extraordinary EU market prices. In 2023, Serbia’s net exports accounted for roughly 3.1 TWh, with EPS driving export contracts with neighbouring grid partners. In cleaner hydrological conditions, exports have at times accounted for close to 10% of gross generation, generating substantial foreign currency revenues that support the national trade balance. Export volumes have exhibited seasonal variation; in winter months when domestic demand peaks, exports compress but rarely flip into persistent net import dependency as seen in previous years. By 2025 the combination of improved hydropower performance and stable lignite output has ensured exports remain structurally positive, supporting Serbia’s macroeconomic framework without exposing EPS to adverse price spikes.
Revenues, margins and profitability have similarly stabilised. Following unprecedented losses in 2022 driven by crisis imports and unfavourable forward contract settlements, EPS swung into robust profit territory in 2023, reporting net income of approximately RSD 114.0 billion (≈ €970 million). This was swiftly followed by a normalisation phase in 2024 when net profit contracted but remained positive at about RSD 26.1 billion (≈ €225 million). The first three quarters of 2025 delivered cumulative net profit of roughly RSD 35.0–38.0 billion (≈ €300–€330 million), driven by improved export pricing, disciplined fuel sourcing and reduced operational costs.
In the context of investor analysis, EPS’s OPEX performance has also demonstrated encouraging discipline. Total operating costs in 2024 were approximately RSD 768 billion (≈ €6.6 billion), with fuel and logistics accounting for the largest share but trending downwards relative to revenue growth as coal efficiencies improved and imports declined. Compared with 2022’s exceptional OPEX spike (driven by crisis market purchases and extraordinary transmission tariffs), this represents a structural improvement in cost management that supports longer-term operational sustainability.
A defining aspect of EPS’s renewed financial strength is its liquidity and working capital position. At the end of 2025’s first half EPS reported cash and marketable securities of approximately €1.0 billion, providing a substantial buffer against seasonal volatility and short-term commodity price fluctuations. Net debt to EBITDA, a common credit metric, has steadily declined from crisis highs above 5.0x in 2022 to levels approaching 3.0x by mid-2025, reflecting both earnings recovery and prudent financing discipline. This reduction in leverage is critical in maintaining favourable credit access, reducing refinancing risk and preserving sovereign balance-sheet capacity.
EPS’s strategic importance is magnified when framed against Serbia’s macroeconomic objectives. Electricity cost stability directly affects inflation, industrial input pricing and competitiveness in export sectors such as automotive components, machinery, food processing and metals. A resilient and domestically capable utility dampens inflationary pressures because electricity is a foundational input for manufacturing and services. A fall in imported electricity dependency — hauled in at spot market peaks — materially reduces Serbia’s exposure to European ETS-linked pricing dynamics. More importantly, EPS’s stability enables policymakers to maintain moderate, predictable tariffs for households and industry, supporting consumption confidence, investment planning and social equity in energy costs.
The export role of EPS also reinforces Serbia’s fiscal narrative. Foreign currency earnings from electricity exports in peak years have contributed an estimated €150–€220 million annually, with occasional spikes in exceptionally hydrological years. These foreign currency inflows directly support the trade balance, strengthen the dinar, and reduce pressure on import bills. Viewed alongside Serbia’s broader export portfolio, energy exports now account for a meaningful portion of merchandise trade, complementing metals, agricultural goods and automotive components in diversifying national receipts.
EPS’s organisational evolution is another core factor. The company has transitioned from a reactive operations mindset to a strategic long-range planning framework. It now manages multi-year investment cycles instead of short-term patch maintenance. This shift has improved procurement discipline, capital execution and operational reliability metrics, including forced outage rates and planned maintenance adherence. Transmission and distribution interfaces have been aligned more closely with generation strategy, reducing curtailments and improving capacity factor averages across the fleet.
However, EPS’s story is not without its challenges. The asset base remains significantly lignite-intensive, and while lignite contributes reliable baseload, it also faces increasing environmental compliance costs and regulatory pressures. The European Green Deal and associated cross-border climate policy frameworks — even when filtered through non-EU member dynamics — exert downward pressure on coal generation economics. EPS cannot indefinitely defer diversification; its medium-term planning recognises this, and it has begun to recalibrate generation mix projections to grow renewables alongside legacy assets.
Hydrology remains a key volatility vector. Hydro output in 2023 was unusually supportive, but 2024 and 2025 have featured seasonal swings that required careful balancing with coal output and short-term market transactions. This dynamic underscores the need for greater portfolio diversification, especially with solar and wind assets that reduce total system exposure to river flows. EPS’s moderate solar pipeline — currently at about 100 MW installed or under construction as of 2025 — is a nascent but essential element of this transition, with plans to scale to 500–700 MW by 2030.
Another structural risk is regulatory stability. EPS’s financial resilience depends on predictable tariff frameworks that reflect underlying cost of service, fuel price pass-throughs and investment cost recovery. Serbia’s regulatory environment has improved in this regard, but it remains critical that energy policy retains transparency and credit predictability to sustain investment confidence over decade-long horizons.
Taken together, EPS now represents a fundamentally different enterprise than the one that staggered through 2021 and 2022. It is an operationally stable generator of roughly 30–35 TWh per year, a reliable net exporter, a profitable enterprise with multi-hundred-million-euro net income, and a key catalyst of national economic stability. The macro-economic implications are significant: predictable energy costs underpin industrial competitiveness, export earnings strengthen the trade balance, and stable utility performance reduces sovereign risk. EPS today is not only Serbia’s energy backbone — it is one of its principal economic stabilisers, and for investors and policymakers alike, its restored strength simplifies strategic forecasting across industrial, fiscal and energy security models.