The decision by power utility EPS to open its coal ash landfills, overburden dumps and degraded mining land to foreign joint-venture partners for solar and battery storage projects looks puzzling at first glance. EPS owns the land, controls grid access, understands the system better than any private player, and in theory enjoys implicit sovereign backing. In other European countries, state utilities have used precisely these advantages to develop post-coal solar and storage projects in-house. Serbia chose a different path, and the reasons lie far deeper than project-level economics.
At a structural level, EPS is not short of assets; it is short of institutional freedom. Coal landfills and ash dumps represent stranded liabilities on EPS’s balance sheet, not clean development platforms. Environmental remediation obligations tied to these sites are long-term, uncertain and politically sensitive. Turning them into solar or battery projects does not erase those liabilities; it repackages them. When EPS develops alone, all legacy risk — soil stability, contamination, groundwater issues and future remediation claims — remains fully consolidated on its books. By introducing foreign JV partners, EPS externalises part of that risk, even if nominal ownership of land remains domestic. In effect, the JV structure becomes a risk firewall.
There is also a balance-sheet reality that feasibility studies rarely state explicitly. EPS is already capital-constrained. Maintaining lignite operations, refurbishing aging thermal units, modernising large hydropower and keeping the grid stable absorbs billions in capex and opex over a decade. A single utility-scale solar plus battery complex on reclaimed coal land can require €120–180 million for 150–200 MW of PV and €60–100 million for 200–300 MWh of battery storage. Doing this across multiple sites would push cumulative investment well above €1 billion. Unlike reversible hydro or lignite refurbishment, these projects do not directly stabilise EPS’s cash flow in the short term. For EPS management, tying up scarce capital in merchant-exposed solar and storage competes with keeping the system running today.
Foreign JV partners bring something EPS does not easily access: de-risked capital and regulatory leverage. Many of these partners are not just investors or EPC players. They are embedded in European policy networks, supply chains and financing channels. They help shape market rules rather than merely comply with them. For EPS, partnering with such actors increases the probability that projects qualify for preferential treatment under evolving EU-aligned frameworks, even in a non-member state. This is not about technical competence; it is about positioning inside a ruleset that Serbia does not fully control but must increasingly follow.
Another decisive factor is market design. Serbia still lacks a fully developed capacity or flexibility market. Solar revenues are increasingly merchant, while battery storage monetisation depends on ancillary services, price volatility and future regulatory constructs. When EPS builds alone, it absorbs full exposure to these uncertainties. When a foreign partner leads development, the project is often structured under long-term power purchase agreements, hedged trading strategies or quasi-contractual arrangements that EPS, as a regulated public utility, cannot easily replicate without political scrutiny. The JV structure allows projects to be banked under assumptions that EPS would struggle to defend domestically.
Governance also matters. EPS is subject to intense public oversight. Any standalone investment decision involving foreign equipment suppliers, battery technologies or long-term offtake assumptions becomes politically charged. Joint ventures diffuse accountability. Decisions become “partnership outcomes” rather than unilateral EPS commitments. This reduces political exposure for management in case of underperformance or controversy. In countries where state utilities act with clearer shareholder mandates and stronger insulation from day-to-day politics, this diffusion is unnecessary. In Serbia, it is rational.
There is also a strategic decarbonisation narrative at play. Coal landfills are symbolic. Repurposing them into solar and storage sends a strong transition signal to Brussels, lenders and rating agencies. Doing so with foreign partners amplifies that signal. It frames the projects as part of a broader European energy transition ecosystem rather than as domestic experiments. For EPS, this reputational leverage can be as valuable as the electrons produced, particularly as future financing increasingly hinges on ESG perception.
Why, then, did EPS not follow the path of utilities in other countries that built alone? Because those utilities operate under different constraints. They often have explicit state guarantees for transition investments, regulated cost recovery for storage assets, and clear mandates to act as long-term infrastructure investors. EPS operates in a hybrid space: commercial enough to be blamed for losses, public enough to be constrained in upside capture. In that space, capital-intensive, rule-dependent assets like solar and batteries on legacy coal land are institutionally unattractive to build solo.
The deeper paradox is that EPS effectively ceded first-mover advantage on its own land. By allowing foreign JV partners to lead, it accepted a role closer to landlord and system facilitator than strategic owner of new flexibility assets. Over time, this may shift market power. Battery operators embedded in these JVs will influence balancing markets, price formation and dispatch logic. EPS will buy services it could, in theory, have owned.
Yet from EPS’s internal logic, the choice is consistent. Developing alone would mean consolidating environmental legacy risk, committing scarce capital, defending new market exposure without mature rules, and carrying political accountability for outcomes over decades. Partnering transfers much of that burden to actors better positioned to absorb and shape it.
This is why EPS did not behave like its peers in other countries. It did not lack land, knowledge or technical capability. It lacked a framework that rewards ownership of transition risk. Until Serbia explicitly decides that EPS should be a long-term transition asset owner — with cost recovery, regulatory protection and political backing — foreign JV partners will continue to dominate solar and battery projects on coal landfills. The projects will happen. The rules will be written. And EPS will participate, but not lead.
The decision was not accidental. It was an institutional compromise that reflects where power, risk and accountability currently sit in Serbia’s energy system.