As Europe pivots towards hydrogen as a cornerstone for industrial decarbonization, Serbia finds itself grappling with the complexities of integrating this energy vector into its existing electricity framework. The country’s reliance on lignite and hydropower complicates its ambitions to develop hydrogen capabilities, particularly in sectors like steel and chemicals, which are being eyed for potential export to the European Union.
The science behind hydrogen generation is clear: it involves water electrolysis, which requires substantial electricity input. The theoretical energy requirement stands at approximately 39 kWh per kilogram of hydrogen, but practical applications reveal that modern electrolysers consume between 50 and 55 kWh per kilogram. This translates to a staggering demand of 50–55 megawatt-hours for every tonne of hydrogen produced, highlighting the significant electricity requirements needed for large-scale production.
In Serbia, annual electricity generation hovers around 35–38 terawatt-hours (TWh). Consequently, even a moderate target of producing 200,000 tonnes of green hydrogen annually would necessitate around 10–11 TWh, accounting for nearly 30 percent of the nation’s current power output. This raises critical questions about the feasibility of such hydrogen ambitions within the existing energy landscape.
The implications for Serbia’s energy system are profound. Currently, the nation’s power generation is heavily reliant on lignite-fired thermal plants, with hydropower contributing variably based on seasonal conditions. While wind and solar capacities have seen recent growth, they remain insufficient to meet the high electricity demands associated with hydrogen production without overhauling the current grid structure.
If Serbia were to utilize its existing electricity mix for hydrogen production, it would not only fall short of European decarbonization standards but also risk maintaining a high carbon footprint. Therefore, any serious pursuit of hydrogen for European markets must pivot towards low-carbon electricity sources—either through new renewable installations or by importing from neighboring regions—both requiring substantial investment in infrastructure.
The scale of renewable capacity needed becomes evident when considering operational assumptions for electrolysers. With an operational time frame of roughly 4,000 to 4,500 hours per year, one gigawatt (GW) of electrolyser capacity would demand approximately 8–9 TWh annually. To meet this need with solar energy alone would require an estimated 4–5 GW of photovoltaic capacity, while wind energy would necessitate about 2.5–3 GW.
This demand far outstrips current project capacities in Serbia, where even large-scale wind developments rarely exceed 300 megawatts (MW). Therefore, achieving industrial-scale hydrogen production will likely require coordinated clusters of renewable projects rather than isolated efforts.
The economic viability of hydrogen production is closely tied to electricity costs, which constitute approximately 60–75 percent of total production expenses. For instance, at an electricity price of €30 per MWh, hydrogen could be produced at around €1.5 per kilogram. However, if prices rise to €60 or €100 per MWh, production costs could double or become untenable for most industrial applications.
This cost structure has led many projects to gravitate towards regions abundant in renewable resources rather than areas with established industrial centers. Countries rich in solar or wind resources can produce hydrogen more economically compared to those with higher structural power prices.
Serbia’s geographical positioning offers a strategic advantage as a transit corridor between Central Europe and the Balkans. This could facilitate future developments where hydrogen becomes another traded commodity linked to regional energy systems—provided that large renewable clusters emerge in the Western Balkans.
A successful transition will require several critical steps: significant expansion in renewable generation capacity; enhancements to the electricity grid to accommodate variable generation; and securing stable contracts for industrial consumers at competitive rates. Without these foundational elements, aspirations for hydrogen production risk becoming mere symbolic gestures rather than transformative changes within Serbia’s energy landscape.
This does not negate hydrogen’s potential role in Serbia’s energy transition; certain industries depend on it as a feedstock rather than just a fuel source. However, even these applications demand substantial electricity inputs—a single large steel plant may require several terawatt-hours annually—comparable to multiple large renewable installations or mid-sized power stations.
The pressing question remains whether Serbia’s electricity system can evolve swiftly enough to support burgeoning hydrogen initiatives. Viewing these projects primarily as expansions in electrical capacity disguised as fuel strategies may provide clarity moving forward. Ultimately, until Serbia significantly scales up its renewable electricity generation capabilities, ambitions surrounding hydrogen will continue to be constrained by fundamental realities regarding affordable electricity availability.
