Currently, the population of Serbia is 6.9 million. The population decline is due to a number of reasons, including low birth rate, high emigration rate, aging population and economic challenges, such as low wages and limited job opportunities. Serbia's GDP growth was +2.5% in 2023 and is projected to be +3.9% in 2024 and +4.1% in 2025.

The level of wages in the country remains relatively low by European standards. In August 2024, the Statistical Office of the Republic of Serbia reported an increase in net wages from January to August 2024 compared to the same period last year by 14.6% in nominal terms and by 9.2% in real terms. In August 2024 median wage was estimated as 75,575 RSD (645.7€), which means that 50% of employees received wages up to this amount.

Despite the low level of incomes, access to electricity is compensated by relatively low prices. Access to electricity in Serbia is widespread – however, as house heating statistics shows, many residents are forced to save on electricity and heat their homes with solid fuel which causes essential ecology damage.

According to the report “Trends in air quality and health in the republic of Serbia” released by State of Global Air project in 2022, more than 50% of Serbia's population lives in areas where the annual PM2.5 levels exceed the World Health Organisation Air Quality Guideline as well as the EU Limit value of 25 ug/m3. In this indicator, Serbia is almost twice as high as the European Union. In the entire Balkan region it is second only to North Macedonia and Bosnia and Herzegovina.

It is noteworthy that these problems and pollution levels are relevant not only for Serbia, but for the entire Balkan Peninsula. Thus, the present study of the energy sources in Serbia and potential opportunities for transition to renewable energy sources may be relevant not only for this country, but for the entire region.

Air pollution in Serbia is mainly driven by a combination of industrial activities, transportation, residential heating, and waste management practices. One of the biggest contributors to air pollution is the energy sector, particularly coal-fired power plants, which release large amounts of particulate matter (PM), sulfur dioxide (SO₂), and nitrogen oxides (NOₓ). This issue intensifies in winter due to residential heating, as many households burn solid fuels like wood and coal.

Thus, there is a strong connection between the critical level of air pollution and the use of traditional energy sources in Serbia. From this perspective, the study of current energy sources and the prospects of transition to renewable energy sources is of great importance for improving the welfare and health of the population of Serbia.

Recently, a number of studies have been conducted by international associations devoted to the impact of the outdated energy system on public health. Most of them note that exceeding the standards for ozone, particulate matter, SO₂ and NOₓ in the air leads to the development of many pathologies, such as chronic obstructive pulmonary disease, diabete, ischemic heart disease, lung cancer and infection diseases.

The dominant producer of electricity in Serbia is the state-owned company EPS (Elektroprivreda Srbije — Power Industry of Serbia). The vast majority of energy is produced with coal; hydropower also has a large share, mainly from stations in the mountainous regions of the west and south of the country.

EPS controls electricity prices for private households due to its monopoly. Electricity prices for companies depend on market situation — in September 2024 EPS introduced more flexible tariffs that allow companies to more accurately regulate the amount of energy they purchase.

In “Specific heating consumption in the residential sector of Serbia—Example of the city of Kragujevac” Nebojsa Lukic, Nebojša Jurišević, Novak Nikolić and Dusan Gordic conducted a detailed research of energy consumption for domestic heating in the city of Kragujevac from 2009 to 2013.

They have shown that the main sources of domestic heat in Serbia are district heating, natural gas and electricity. Low electricity prices (84.94% of the world average electricity price and 56.98% of the average price in Europe lead to an increase in the share of electric heating devices, which are often used in apartment buildings.

One of the most essential reasons for air pollution in Serbia is domestic heating. In the article “Air Pollution and Poverty Kill – In Serbia as Everywhere” Predrag Momčilović claimed that 36% of households use wood-burning stoves as a primary-heating device, and 57% use firewood.

There is also a reversed connection between energy poverty and air pollution. In the study “Air Pollution and Energy Poverty: Evidence From Chinese Households” Xue Li, Roswell Smyth and Yao Yao showed that just as energy poverty causes air pollution, air pollution also influences the growth of energy poverty. This can be attributed to several reasons such as the time people spend indoors, the effect of air pollution on health, and the adverse impact of air pollution on household income.

As was stated above, the coal industry in Serbia is both the main source for electricity production and the essential source of air pollution. According to the report of the Health and Environment Alliance, one of the most important sources of air pollution in Belgrade are Nikola Tesla and Kostolac coal plants. The capital of Serbia is located at the intersection of emissions from these facilities, which, combined with smoke from households, causes severe smog in the city.

Coal mines are also producers of methane emissions. Dr. Sabina Assan, Methane analyst in Ember, claims: “Methane is accelerating climate change this decade and yet we have no idea of the scale of the issue".

According to the Global Energy Monitor’s report for April 2024, total methane emissions from Serbian coal mines are estimated at 121.7 million m3 per year. For example, this figure for the Czech Republic, whose population is 1.6 times larger than Serbian, is 120,2 million m3 per year.

The main investors in coal mining in Serbia are EPS, Huadian Hong Kong Corporation Ltd (China) and NIS Gazprom Ltd (Serbian legal entity of the Russian company Gazprom).

State-owned EPS emphasizes the importance of switching to renewable energy sources and reducing emissions from coal mines. However, in its development plan for the next 10 years, the company has allocated 3.8 billion euros to coal-related projects, only 1.3 billion euros of which is intended for environmental protection and increasing the efficiency of thermal power plants. The volume of investments in sustainable energy sources is 1.3 billion euros.

According to the State of Global Air report, exposures to PM2.5 are highest in the winter months.

The main reason for increasing air pollution in winter is the use of electricity and coal for producing heat. As shown above, the coal industry provides both the majority of electricity and a significant share of the heat for households.

Nevertheless, the human generated factors are enforced by the climate features. The most urbanized regions of Serbia experience a temperature inversion in autumn and winter. Due to natural factors, as well as emissions from factories, thermal power plants and civil transport, dependence of temperature on altitude ceases to be linear. This effect forms a blocking layer — a zone with high pressure which prevents the dispersion of emissions in the atmosphere.

In 2019, a group of Bosnian scientists conducted an experimental study that clearly showed temperature inversions in the Balkans. They created a special aircraft that recorded air characteristics and made graphs based on the information obtained. Thereby, they recorded temperature inversions at many of the points where measurements were taken.

Thus, the already critical air quality in the cold months is worsened by the climate features of the area. It can be concluded that solving the problem of heat production, household access to electricity and energy production methods is the most important factor in overcoming environmental problems in Serbia. The reports of various international organizations have established a connection between air quality and public health. It can be claimed that the well-being of Serbian citizens is highly dependent on the speed and determination of the transition to sustainable energy.

In the study «Potentials and prospects for implementation of renewable energy sources in Serbia» Njegoš M. Dragović, Milovan D. Vuković, and Dejan T. Riznić conducted an extensive analysis of renewable energy sources in Serbia and identified the share of current use of each source. For estimations they have used Mtoe metrics, which reflects the “million tonnes of oil equivalent”.

Currently, the dominant category of green renewable energy in Serbia is hydropower (1.67 Mtoe) and the biomass (1,054 Mtoe). One of the most promising areas for development with the largest share of unused potential is biomass and solar energy. Since Serbia is located in the south of Europe, the average level of solar radiation here is about 40% greater than the European average.

Despite the huge potential for renewable energy sources in Serbia, the ratio of renewable to traditional sources has remained virtually unchanged over the past 30 years. Coal and hydropower continue to play the leading role. Only since 2015 have the share of wind, solar and bioenergy begun to grow, but their capacity is still negligible.

Despite the above-mentioned problems, in recent years the Serbian government has been paying increasing attention to the problems of air pollution and the outdated energy network. A new renewable energy bill, enacted in 2021, supports private investments in renewables with incentives such as net metering for small producers, making it easier for individuals and businesses to generate and use renewable energy locally. The country has also launched auctions for renewable energy projects to attract greater private sector participation, particularly in solar and wind energy development, in line with EU market standards.

In July 2024 the Serbian Government released the Integrated National Energy and Climate Plan (INECP) for the period until 2030. The plan aims to increase the share of renewable resources by 45% by 2030. To achieve this goal, the document focuses on five main directions: decarbonization, energy efficiency, energy security, internal energy market and innovation.

The INECP also outlines substantial investment needs, estimated at €27 billion by 2030. The plan calls for investments from the European Union, international financial institutions, such as EBRD, IFC and World Bank, Serbian government, commercial banks and private investors. Private investment is most actively attracted to such sectors as solar power, wind power and geothermal energy.

Another important structure involved in the transition to sustainable energy in Serbia is The Association Renewable Energy Sources of Serbia. The association was founded on February 24, 2021 with the support of the European Bank and aims to improve the business environment in the field of renewable energy and environmentally motivated promotion of production. The organization regularly holds conferences, exhibitions and consultations for companies focused on the transition to sustainable energy, and its members include businesses that share the values ​​of environmental friendliness and transparency.

Serbia has set itself a number of ambitious goals, as well as allocated budgets and actively attracted investments for the development of the sustainable energy sector. Considering that the majority of initiatives and projects began no earlier than in the last 3 years, it can be said that today Serbia is on the threshold of an important transition in the approach to sources of electricity and heat.

Households also use a range of measures to control and reduce energy consumption. Some citizens use heat accumulation devices. During the day, they accumulate heat to emit it at night. Another essential feature of Serbian apartments is that even household appliances such as water heaters, washing machines and dishwashers are connected to separate switches. Thus, energy-intensive devices can be switched on only when they are needed, which makes control over energy consumption more transparent.

It is also important to mention the influence of citizens on political decision-making related to energy and the economy.Politics in the Balkans is a complex and multifaceted topic. The Socialist Federal Republic of Yugoslavia was a founding member of the Non-Aligned Movement of the XX century. The ideology of the members of this movement declared neutral status in the confrontation between the Soviet Union and the western states during the Cold War. Non-alignment policy has influenced the current situation of Serbia, which is following the course for European integration and receiving investments from both Western countries and Russian and Chinese partners. The ruling Serbian Progressive Party always declares the priority of national interests over joining any influential bloc.

In this complicated landscape, ecology problems regularly become a reason for contradictions between the government and the opposition. Protests against lithium mining in Serbia have been one of the main political issues in the country for the past six months. Citizens and the opposition that supports them oppose the mining because it negatively affects the ecology of the region.

There are also independent journalistic initiatives in Serbia. The Center for Investigative Journalism of Serbia investigates environmental violations increasing the transparency of large corporations and energy projects. In 2017, the center received the European Press Prize.