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North Macedonia advances €119 million storage and grid upgrade as flexibility takes over from coal

North Macedonia is preparing a combined €119 million investment in battery storage and grid digitalisation, signalling a shift in the country’s energy transition from replacing coal generation toward building the flexibility and system-control capabilities needed to operate with a growing share of renewable energy.

The larger component is a proposed 100 MW/400 MWh standalone battery energy storage system in Bitola, with the total project cost estimated at around €98 million.

The investment package would also include new SCADA, electricity trading, generation-planning and cybersecurity systems, creating a broader flexibility and digital-management platform around the storage project.

The European Bank for Reconstruction and Development (EBRD) is considering a loan of up to €33.1 million for the project.

A separate €21 million programme for transmission system operator MEPSO would introduce a new central SCADA/EMS platform, cybersecurity infrastructure and a 400 kV transformer.

The MEPSO project is expected to receive approximately €18.6 million in EBRD financing and a €2.4 million grant from the Western Balkans Investment Framework (WBIF).

Both projects remain under review and have not yet reached financial close.

However, their combination points to a broader strategic shift in North Macedonia’s power system.

From coal replacement to system flexibility

North Macedonia’s electricity system remains heavily influenced by lignite generation, particularly around Bitola.

Replacing coal-fired generation with wind and solar requires more than simply adding new renewable capacity.

Thermal power plants provide dispatchable generation, balancing capability and system support, while solar and wind output varies according to weather conditions.

A 400 MWh battery could help address part of that flexibility requirement by shifting electricity between different hours and providing rapid-response balancing services.

The battery could absorb electricity during periods of high renewable output and release it when demand increases or renewable generation falls.

However, storage can only deliver its full system value if the wider electricity network can accurately monitor conditions and efficiently manage flexible resources.

That makes the grid-digitalisation component of the investment equally important.

Digital grid infrastructure becomes part of the storage strategy

The planned SCADA and EMS upgrades would improve the ability of MEPSO to forecast generation, monitor network flows and coordinate system operations.

Cybersecurity infrastructure would become increasingly important as more generation, storage and grid functions become digitally connected.

The proposed 400 kV transformer would also strengthen the physical network supporting the transition.

Together, these investments address two sides of the same challenge.

The battery provides physical flexibility, while the digital systems provide the information, control and operational capabilities required to use that flexibility effectively.

This becomes increasingly important as North Macedonia expands its renewable generation portfolio.

The country has recently secured financing for the first phase of the large Štip wind project, adding another major variable renewable asset to its development pipeline.

As wind and solar capacity increases, the need for balancing, forecasting and flexible electricity management will also grow.

Bitola could become a flexibility hub

The proposed Bitola battery is particularly significant because of its location.

Bitola has historically been closely associated with coal-fired power generation, but the same area could eventually become an important centre for managing renewable electricity and system flexibility.

A large battery at the site could help North Macedonia manage periods of high renewable production, respond rapidly to changes in supply and demand, and reduce some of the pressure created by the gradual decline of conventional generation.

The project would not replace all of the services provided by thermal power plants, nor would a battery eliminate the need for reliable generation and transmission capacity.

Its role would instead be to provide a different set of capabilities that become increasingly valuable as the generation mix changes.

Flexibility becomes the next stage of the energy transition

The proposed €119 million investment package illustrates how North Macedonia’s energy transition is entering a more complex phase.

The initial challenge was to replace ageing coal capacity and increase renewable generation.

The next challenge is to ensure that the electricity system can operate reliably with a much larger share of variable renewable energy.

That requires batteries, stronger transmission infrastructure, advanced system controls, accurate forecasting and improved cybersecurity to develop alongside new wind and solar projects.

For North Macedonia, the success of the transition will therefore depend not only on how quickly coal generation is replaced, but also on how effectively the country builds the flexibility and digital infrastructure needed to operate the power system without relying on coal for the same services.

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