Serbia’s thermal power sector is showing growing signs of structural stress after the country’s coal-fired power plants recorded 79 unplanned outages since the beginning of 2026, exposing the fragility of aging generation infrastructure that still forms the backbone of Serbia’s electricity system. According to ENTSO-E data covering the period from 1 January to 12 May, as much as 1,865 MW of generation capacity was unavailable at certain moments due to breakdowns, technical failures and unexpected operational interruptions.
The scale of the disruptions is significant when measured against the overall size of Serbia’s thermal fleet. EPS thermal power plants have installed capacity of approximately 4.8 GW, meaning that at times nearly 40% of available thermal generation capacity was simultaneously impacted by outages, maintenance issues or technical failures.
The rising number of failures highlights a deeper structural problem inside Serbia’s energy sector. Much of the country’s coal generation infrastructure was built decades ago, with several major units in the Kolubara and Kostolac systems operating far beyond the age profile considered optimal for stable baseload generation. Years of underinvestment in modernization, delayed revitalization cycles and operational strain following the energy crisis of 2021–2022 have intensified pressure on the system.
In thermal power operations, an “outage” does not simply mean reduced efficiency. It refers to a sudden and unplanned shutdown of a generating unit caused by equipment failure, protection system activation, network disturbances or mechanical breakdowns. Frequent outages create serious operational and financial consequences because the system operator must rapidly compensate for missing generation through imports, hydro balancing or reserve activation.
Several overlapping factors appear to be driving the growing instability.
The first is the age and condition of the existing fleet. Serbia’s lignite-based power stations, particularly older units within the Nikola Tesla and Kostolac complexes, were designed under technological standards from previous industrial eras. Many components have undergone repeated extensions of operational life through partial overhauls rather than complete modernization. Energy analysts have repeatedly warned that maintenance cycles were often postponed during periods of financial stress inside EPS.
The second factor is operational overloading. Following the collapse of domestic production during Serbia’s energy crisis in 2021, thermal units have been forced into more intensive operational regimes. Coal units designed primarily for stable baseload operation increasingly face cycling pressure caused by renewable generation fluctuations, seasonal import dependence and changing regional market conditions. That operating profile accelerates wear on boilers, turbines, cooling systems and auxiliary infrastructure.
Coal quality also remains a recurring issue. Serbia’s thermal fleet relies heavily on lignite from Kolubara and Kostolac mines, where variations in calorific value, moisture content and excavation conditions can materially affect combustion stability and plant efficiency. During periods of poor coal quality, generating units face greater mechanical stress and higher failure risk.
The market environment itself is also changing. Southeast Europe’s electricity system is becoming increasingly volatile due to rising renewable penetration, stronger interconnection and growing intraday price swings. Coal plants that once operated under relatively predictable dispatch conditions now face far more dynamic balancing requirements. Serbia’s thermal units are increasingly forced to respond to variable renewable output from neighboring markets, especially Romania, Hungary and Greece.
The irony is that the outage surge comes at the same time EPS is reporting improved financial results. EPS announced first-quarter 2026 profits of approximately €129 million, supported by lower operating costs and more stable production compared with previous crisis periods. Yet profitability does not necessarily resolve the underlying infrastructure problem, particularly because long-term revitalization of coal generation assets requires multi-billion-euro investment programs.
The situation also raises wider questions about Serbia’s energy transition strategy. While Serbia continues expanding renewable energy capacity, the country still depends overwhelmingly on coal-fired generation for system stability and winter security. Thermal plants remain critical not only for electricity production but also for balancing intermittent renewable output and maintaining grid reliability.
That creates a difficult contradiction for policymakers. Serbia faces increasing pressure from the European Union and Energy Community to reduce coal dependency, improve emissions standards and accelerate decarbonization. At the same time, the country cannot realistically stabilize its power system in the near term without functioning thermal generation assets.
The recently commissioned Kostolac B3 unit illustrates that contradiction. The 350 MW coal-fired block, developed with Chinese financing and EPC support from CMEC, was presented as a strategic pillar of Serbia’s future energy security. Yet critics argue that the country simultaneously remains burdened by an aging fleet that requires extensive rehabilitation while Europe is moving steadily toward coal phaseout frameworks.
The financial implications are also growing. Frequent outages increase balancing costs, raise import dependence during peak periods and expose EPS to volatile regional electricity prices. During periods of tight regional supply, unexpected thermal failures can force Serbia into expensive electricity imports from neighboring markets.
Grid reliability risks become even more pronounced as Serbia expands renewable generation. Wind and solar capacity additions increase the importance of flexible and stable backup generation. If coal units continue experiencing frequent technical instability before sufficient storage and balancing infrastructure is deployed, the system could face growing operational vulnerability.
The broader issue increasingly resembles a transition gap. Serbia is attempting to simultaneously preserve aging coal infrastructure, integrate renewable generation, modernize the grid and comply with European environmental obligations, all while maintaining affordable electricity prices and energy security. The rising number of thermal outages suggests the technical limits of that balancing act are becoming increasingly visible.
