Serbia is heading into what could be one of its most challenging hydrological years in decades. Elektroprivreda Srbije (EPS), the country’s state-owned energy giant, forecasts that hydropower output in 2025 may fall by as much as 25 percent compared with the previous year. The projected annual production of around 8,000 GWh is not merely a statistical decline — it is a warning signal that Serbia’s energy system is entering a period of structural vulnerability driven by climate volatility, infrastructure fatigue and insufficient long-term planning.
Hydropower has long served as the backbone of Serbia’s flexible generation. Across the Djerdap hydropower complex, the Drina-Limske plants, Bajina Bašta, and the series of run-of-river stations that shape the country’s energy geography, water availability has determined the rhythm of the grid. When rainfall is abundant, Serbia’s hydropower fleet ensures stable baseload support, seasonal balancing and price moderation. When water levels recede, the system leans heavily on coal and increasingly on electricity imports. The current projections suggest that 2025 will fall firmly into the latter category.
This downturn is not an isolated meteorological episode. Analysts at serbia-energy.eu have repeatedly cautioned that Serbia is entering an era where hydropower can no longer be taken for granted. The climate trendline — higher temperatures, extended drought cycles, irregular precipitation and extreme weather — is reshaping hydrology across the Western Balkans. In such conditions, reservoirs cannot be replenished predictably, and run-of-river stations lose their seasonal consistency. What was once considered a reliable natural asset has become a variable risk factor.
EPS itself points to this climate dynamic, but the deeper story lies in how the system has responded — or failed to respond — over the past decade. Serbia invested insufficiently in modernizing hydropower plants, expanding storage capacity, or upgrading transmission corridors that would allow better regional balancing. The result is a system that now reacts to drought, rather than anticipates it. The situation at Djerdap is especially revealing. Once a symbol of Yugoslav-era energy self-confidence, the complex now faces aging turbines, outdated automation systems and the limitations of a binational coordination regime with Romania that complicates modernization timelines.
As hydropower output drops, pressure shifts to Serbia’s already strained thermal fleet. Coal plants at Kostolac and the massive Nikola Tesla complex (TENT) must run harder and longer, despite frequent breakdowns, inefficiencies and environmental constraints. These units were never intended to compensate for prolonged hydropower deficits. A system relying too heavily on coal for flexibility is one forced to confront the inherent contradictions of short-term necessity and long-term transition.
This tension underscores why the 25 percent decline is more than a weather statistic — it reveals an energy architecture struggling to evolve. Serbia’s renewable ambitions depend not only on adding wind and solar capacity, but on securing a flexible, diversified system where hydropower plays a stabilizing role. When hydropower falters, the consequences cascade: balancing costs rise, import dependence increases, and market prices become more volatile. Serbia has already experienced episodes where sudden hydrological shortages forced the country to import power at the most expensive hours, straining EPS finances and exposing the system to regional price shocks.
EPS’s current warnings about 2025 reflect internal concerns as well. Hydropower is one of the few segments where EPS operates efficiently and profitably. Reduced generation hurts its financial stability at a time when the company faces a long list of capital-intensive obligations: modernization of coal units, grid upgrades, expansion of renewable sources, compliance with EU emissions standards and preparation for future market liberalization. When one of the company’s most reliable profit centers shrinks, the internal balance sheet comes under pressure.
Yet this could also be a turning point — if Serbia chooses to respond strategically. The hydropower downturn reveals three strategic imperatives for the coming decade.
First, Serbia must modernize its hydropower fleet comprehensively, not incrementally. Several Djerdap units are overdue for refurbishment. Automated flow management, real-time hydrology monitoring and turbine efficiency upgrades are essential. Countries across the Alps and Scandinavia have shown that modernization can extend hydro capacity significantly, even in changing climate conditions.
Second, Serbia must expand water-storage and pumped-storage capabilities. Pumped-storage hydropower — a topic frequently explored in analytical features by serbia-energy.eu — is the backbone of renewable integration. Serbia’s current storage portfolio is insufficient for the level of wind and solar expansion envisioned by 2030–2035. Projects such as Bistrica PSP, RHE Đerdap 3 and potential smaller regional storage systems could transform the system’s flexibility profile, reducing the vulnerability to drought cycles.
Third, the grid must evolve into a modern balancing platform. Transmission constraints, especially in western and southern Serbia, already limit the system’s ability to redistribute power during hydro shortages. Upgrading 400 kV corridors, enhancing interconnection with Montenegro, Bosnia and Herzegovina, North Macedonia and Bulgaria, and implementing advanced grid-management systems would create structural resilience beyond hydrological factors.
Meanwhile, the short-term horizon remains difficult. Serbia will likely need to continue importing power during 2025, particularly in winter and early summer peaks. The import bill will depend on the dynamics of Central European markets, natural gas prices, and regional hydrological conditions. EPS must also manage public expectations, as hydrological risks are often misunderstood and easily politicized, particularly when they translate into cost increases or reduced system stability.
But the long-term significance of this moment is clearer than ever. Serbia is experiencing, in real time, the limits of a system that depends too heavily on predictable hydrology. The 8,000 GWh projection is a warning — not only about water scarcity but about institutional readiness. Energy systems that adapt survive; those that hesitate become fragile.
If Serbia responds decisively — upgrading hydropower, investing in storage, modernizing the grid and accelerating renewable diversification — the country can transform vulnerability into opportunity. But if it postpones reforms, hydropower volatility will continue to expose EPS, the market and the broader economy to increasing risk.
The story of 2025 will not be written by the weather alone. It will be written by how Serbia chooses to respond to a crisis that has been building for years — and by whether the country finally aligns its energy ambitions with the reality of a changing climate and an evolving regional market.
