Serbia’s energy transition is still described almost entirely in megawatts. New projects are announced in MW, targets are framed in MW, and public debate treats capacity additions as if they were interchangeable with usable energy. For CBAM-exposed exporters, this framing is not just incomplete—it is actively misleading. What determines competitiveness under CBAM is not how many megawatts exist on paper, but how many terawatt-hours of verifiable, deliverable, shape-compatible green electricity actually reach industrial buyers over a year, under real grid and market conditions.
This distinction between MW and TWh is not semantic. It sits at the core of why Serbia risks building an energy transition that looks impressive domestically but fails commercially once EU procurement logic is applied. Megawatts measure political intent. Terawatt-hours measure industrial reality.
The problem begins with the way capacity metrics hide utilisation. A 1,000 MW solar portfolio in Serbia, operating at 17–19% capacity factor, produces roughly 1.5–1.7 TWh per year under ideal conditions. A 600 MW wind portfolio, operating at 32–38%, can produce a comparable or even higher annual volume. Yet the MW headline tells a completely different story: solar appears larger, more ambitious, more transformative. For an exporter facing CBAM, those optics are irrelevant. What matters is whether 1.5–2.0 TWh of green electricity can be delivered reliably, year after year, without chronic curtailment or shape mismatch.
MW framing also hides timing. Solar produces most of its output in a narrow midday window. Wind spreads production across hours and seasons. Two portfolios with identical annual TWh can have radically different economic value because one delivers energy when it is needed and the other delivers it when the system is already saturated. MW metrics flatten this distinction. TWh metrics expose it immediately.
For CBAM-exposed industry, shape matters as much as volume. An aluminium processor, steel mill, or fertiliser plant consumes electricity across shifts, nights, and seasons. A green electricity strategy that delivers large volumes at noon but little at night forces the buyer into balancing purchases, replacement certificates, or complex accounting that weakens compliance credibility. This is why industrial procurement teams increasingly ask not “How many MW back you?” but “How many usable MWh do you deliver against our load profile?”
Curtailment makes the MW illusion even more dangerous. In a congested system, installed capacity does not equal delivered energy. At portfolio scale, curtailment rates of 5–10% are not exceptional for solar-heavy builds without sufficient flexibility. A 1.6 TWh solar portfolio losing 8% of output delivers only 1.47 TWh of eligible green electricity. That shortfall—130 GWh per year—is not an accounting detail. At a green electricity value of €70–90 per MWh, it represents €9–12 million of lost value annually and, more importantly, a compliance gap that must be filled elsewhere.
MW metrics also obscure grid reality. Transmission systems do not absorb capacity uniformly. They absorb energy flows over time. A cluster of projects totalling 500 MW connected to a single strong node may look manageable in MW terms but can overwhelm that node in specific hours, forcing curtailment or export caps. From the perspective of an industrial buyer, it does not matter that the national system has spare capacity elsewhere. What matters is whether the contracted green electricity is actually delivered. TWh accounting forces this issue into the open.
The same distortion appears in public targets. Announcing X MW of renewables by 2030 says nothing about whether those MW translate into Y TWh of usable green supply for industry. Two countries with identical MW targets can end up with radically different industrial outcomes depending on capacity factors, curtailment regimes, and aggregation. Serbia’s current discourse rarely makes this explicit, which encourages a false sense of progress.
From an investor perspective, the MW obsession also masks return risk. Project IRRs are ultimately driven by delivered MWh multiplied by capture price, minus costs. A project that installs capacity cheaply but loses energy to curtailment or earns poor capture prices is not cheaper in economic terms. When industrial buyers rely on such projects for CBAM compliance, the risk shifts from the generator to the buyer. That shift shows up as lower willingness to pay, shorter contracts, and higher discount rates—all invisible in MW announcements.
The MW–TWh confusion also distorts technology choice. Solar dominates MW pipelines because it is easier to scale in capacity terms. Wind dominates TWh delivery per MW. When policy and public discourse reward MW, they implicitly favour solar even when wind would deliver more usable energy per euro invested. Under CBAM, this bias is costly. Wind’s higher capacity factor and less synchronised output mean that each installed MW delivers more compliance-relevant energy and imposes less system stress. MW framing hides this advantage.
Storage is often presented as the solution that makes MW interchangeable with TWh. In reality, storage converts energy across time but does not create it. It can reduce curtailment and improve shape, but it does so at a capital cost that must be justified by the value of preserved TWh. When storage is added to a portfolio designed around MW optics rather than TWh deliverability, it often ends up compensating for a flawed base design. This is why storage should be sized against lost TWh risk, not against installed MW.
Aggregation further exposes the MW illusion. At portfolio level, what matters is not how many MW are installed, but how many MWh can be firmed, shaped, and delivered across contracts. Aggregators trade in TWh blocks, not in nameplate capacity. Industrial buyers increasingly do the same. They want annual volumes, seasonal profiles, and reliability bands. MW announcements do not answer those questions.
The CBAM framework accelerates this shift because it forces emissions accounting to be tied to actual delivered energy, not to theoretical capacity. EU buyers will not credit a supplier for MW that exist but do not produce eligible electricity in the relevant period. They will credit delivered TWh with verifiable provenance. This is why Serbia’s exporters increasingly face questions that national energy statistics do not yet answer.
There is also a strategic timing issue. MW can be installed quickly, but TWh delivery ramps more slowly. Grid constraints, curtailment, and commissioning delays mean that the first years of operation often underdeliver relative to nameplate expectations. For CBAM-exposed exporters, those early years matter most, because procurement decisions and supplier rankings are being reset now. A project that promises 1.5 TWh per year but delivers 1.1 TWh in its first two years may still look successful in MW terms, but it fails the industrial test.
The consequence of continuing to speak in MW is that Serbia risks overestimating its decarbonisation readiness and underestimating the compliance gap facing exporters. This leads to mismatched expectations, rushed stop-gap solutions, and ultimately higher costs. Exporters discover the gap only when EU buyers push back. By then, the leverage is gone.
The corrective is straightforward in concept but uncomfortable in practice. Serbia’s energy transition needs to be reframed in TWh delivered under stress. Targets should specify how many terawatt-hours of green electricity will be available to industry, with explicit assumptions on curtailment, aggregation, and grid readiness. Technology choices should be evaluated on TWh per euro and TWh per unit of grid stress, not on MW alone. Storage should be sized to protect TWh delivery, not to decorate MW pipelines.
For CBAM-exposed exporters, this reframing changes procurement behaviour immediately. Instead of chasing the lowest-price MW, they seek portfolios that can guarantee annual delivered volumes, with defined tolerance bands and replacement mechanisms. Wind-anchored, aggregated portfolios become more attractive. Solar remains valuable, but only where it adds TWh without destabilising delivery.
The strategic conclusion is that Serbia’s energy transition will succeed or fail not on how many megawatts it installs, but on how many credible terawatt-hours it delivers to the right buyers, at the right time, with the right reliability. CBAM makes this distinction unavoidable. MW are politics. TWh are competitiveness.
Elevated by clarion.energy