Serbia has demonstrated that large-scale wind developments can be built, financed and connected. The inauguration of Čibuk 2 in September 2026 added 154 MW to the existing 158 MW Čibuk 1, forming a 312 MW wind complex in South Banat. The next challenge is managing the electricity market impacts once turbines are operating.
The two Čibuk projects represent more than €500 million in investment. Serbia’s wider renewable auction programme has also attracted substantial investment, with the European Bank for Reconstruction and Development (EBRD) saying its first two competitive auctions allocated nearly 1,300 MW of wind and solar projects. Those projects include the Pupin and Čibuk 2 wind farms.
Balancing exposure grows with wind output
For Serbia’s first generation of wind projects, the focus was on overcoming permitting, financing and grid-connection barriers. Operational market exposure is becoming more important for the next generation. Wind production must be forecast before delivery, while the balancing responsible party carries the difference between nominated and actual positions under the applicable market rules.
EMS reports that the average upward balancing-energy price used for specified risk and settlement calculations was €154.174/MWh for 2026, compared with €136.523/MWh in 2025 (EMS reports). This is not the automatic imbalance cost for every wind farm, but it illustrates why forecast deviations can have material economic consequences.
A project may produce exactly the annual volume assumed in its financing case and still incur substantial balancing costs if actual hourly output repeatedly differs from its nominated schedule. Annual MWh can therefore meet expectations while net cash flow falls short. Forecasting is consequently a commercial function, not simply an operational input.
Forecasting and contracts shape project economics
Weather forecasts, turbine-level production models, real-time SCADA data and intraday trading capability increasingly affect project revenue. The closer a trader can bring a contracted position to actual production before gate closure, the smaller the residual imbalance exposure is likely to be. Portfolio management may also help if forecast errors across renewable assets offset one another.
That benefit depends on the physical correlation between projects. Wind farms in the same meteorological region may deviate in the same direction at the same time. Serbia’s concentration of significant capacity in Vojvodina makes this a particularly relevant consideration.
Balancing responsibility needs to be assessed at contract level: who submits nominations, owns the forecasting model and has authority to trade intraday? Contracts should also specify who pays when measured output differs from the nominated position and how balancing costs are divided between the generator and trader. These terms can materially change the economics of otherwise similar power purchase agreements (PPAs).
Transparency is especially important when a third-party trader or balancing responsible party controls settlement. Wind farm owners should be able to trace the process from forecast and nomination through measured output to balancing settlement. Without that visibility, imbalance can become a commercial cost that is difficult to audit.
Flexibility and financing considerations
The growing sophistication of Serbia’s electricity system could create opportunities. EMS procures ancillary services and operates balancing arrangements that include frequency-related reserves and balancing activation. In the longer term, wind projects combined with storage, flexible portfolios or capable aggregators could move beyond creating balancing requirements and provide some of the flexibility needed to manage them.
That would require technical qualification, control systems and clear market rules. It also calls for a different approach to financing, with balancing costs no longer treated as a small, generic operating assumption. Lenders should assess historical forecast-error distributions, trading arrangements, the quality of the forecasting provider and the contractual allocation of imbalance.
Lenders should also stress periods when several adverse factors occur together. A wind farm could produce less than forecast while upward balancing energy is expensive; unexpectedly high output could instead arrive during a regional surplus period when prices are weak. The risk is asymmetric.
Market integration is increasingly important alongside generation. Serbia has already shown that wind can attract international investors and non-recourse financing. The next competitive advantage will come from operating those assets efficiently in a more liquid, volatile and increasingly regional electricity market: turning variable production into predictable cash flow.