By 2025, corporate power purchase agreements in Serbia moved from theoretical relevance to practical necessity, but along a trajectory that differs materially from the rest of Southeast Europe. While Romania, Greece and Bulgaria entered the PPA phase through surplus renewable capacity and price cannibalisation, Serbia entered it through scarcity, volatility and structural exposure to fossil-linked pricing. This distinction matters, because it defines both pricing power and risk allocation in Serbian PPAs.
Serbia’s corporate PPA market in 2025 is not driven by oversupply of solar or wind. It is driven by the absence of sufficient domestic renewable capacity relative to industrial demand and by a power system still anchored to coal and hydro variability. As a result, PPAs in Serbia are not defensive instruments designed to protect against price collapse. They are strategic instruments designed to secure availability, stability and regulatory positioning.
The starting point is Serbia’s electricity cost structure. Wholesale prices in 2024–2025 remained structurally elevated, with baseload prices frequently clearing in the €70–85 per MWh range and peak prices materially higher during stress periods. Industrial consumers exposed to spot markets experienced wide month-to-month variance, driven by hydrology, lignite availability and regional gas pricing. Unlike Bulgaria or Greece, where midday solar output depresses prices, Serbia’s system still exhibits scarcity pricing during peak demand hours.
This scarcity creates a fundamentally different PPA pricing corridor. In 2025, Serbian corporate PPAs rarely cleared below €80 per MWh, even for long tenors. Typical pricing for wind-backed PPAs clustered between €85 and €95 per MWh, depending on duration and shaping. This is higher than Romania’s most competitive wind PPAs, which often traded closer to €70–80 per MWh, but lower than the risk-adjusted cost of remaining fully exposed to Serbian wholesale volatility over a ten-year horizon.
The buyer profile in Serbia also differs. In Romania and Greece, early PPA demand was driven by multinationals with ESG mandates. In Serbia, 2025 demand is primarily industrial and operational, not reputational. Metals processors, automotive suppliers, food producers, construction materials manufacturers and logistics operators dominate the buyer base. Their motivation is cost predictability rather than carbon branding, although carbon exposure increasingly reinforces the case.
Contract sizes reflect Serbia’s industrial structure. Most PPAs signed or negotiated in 2025 fall in the 15–50 GWh per year range, aligned with medium-sized industrial facilities rather than hyperscale consumers. This creates a structural advantage for wind farms in the 50–150 MW class and for aggregated portfolios combining wind with limited solar or hydro shaping.
Unlike Romania, Serbia does not yet support a deep merchant-forward curve. As a result, PPAs are less about arbitraging forward prices and more about removing uncertainty altogether. Buyers are willing to pay a premium for stability. This explains why Serbian PPAs typically include price indexation clauses capped on the upside but protected on the downside, reflecting asymmetric risk preferences.
Shaping is emerging as a critical differentiator. Serbian industrial demand is often continuous or peak-weighted, while wind output remains variable. As a result, flat PPAs are increasingly unattractive. In 2025, shaped PPAs that include portfolio aggregation or balancing services commanded €7–12 per MWh premiums over unshaped contracts. This premium reflects real system costs rather than financial engineering.
Compared with Greece, where shaping increasingly relies on storage, Serbia relies more heavily on portfolio-level balancing. Wind portfolios paired with flexible hydro imports or cross-border balancing capacity achieved materially better contractability. This is a key regional contrast. Serbia’s PPA market is structurally integrated with neighbouring systems, particularly Romania and Hungary, rather than being internally self-sufficient.
Credit risk is another defining feature. Serbian industrial buyers generally lack the balance-sheet strength of Western European multinationals. This has pushed the market toward intermediary-led structures. In 2025, a growing share of Serbian PPAs are signed via aggregators or traders that assume counterparty risk and deliver firm power to buyers. These intermediaries capture €3–6 per MWh in margin for credit wrapping and balancing, but they also enable deals that would otherwise not close.
From the producer perspective, PPAs in Serbia materially alter asset bankability. Wind farms operating under merchant exposure achieve attractive cash flows in good hydrology years but face downside risk during coal or grid disruptions. A PPA-backed revenue floor at €85–90 per MWh dramatically improves debt service coverage and dividend predictability. By late 2025, PPA-backed Serbian wind assets secured debt pricing 30–50 basis points tighter than merchant-only peers.
Compared with Bulgaria, the Serbian PPA market is smaller but cleaner. Bulgaria’s solar-heavy system forces PPAs to absorb cannibalisation risk. Serbia’s PPAs are not distorted by midday price collapse, making long-term contracting structurally simpler. The trade-off is limited volume. Serbia simply does not yet have enough renewable capacity to satisfy all potential PPA demand.
Carbon exposure increasingly enters the equation. While Serbia is outside the EU ETS, export-oriented industries are not insulated from EU carbon reporting and adjustment mechanisms. Renewable-backed PPAs reduce reported scope-two emissions and future carbon cost exposure. In 2025, several Serbian industrial PPAs explicitly quantified avoided carbon-adjustment risk as part of investment justification, a trend previously seen only in EU markets.
The strategic implication is that PPAs in Serbia function less as price arbitrage tools and more as industrial infrastructure. They secure electricity availability, stabilise costs and support financing decisions. This positions PPAs as enabling assets rather than optional hedges.
Looking forward, Serbia’s PPA market is constrained by capacity rather than demand. As new wind and solar projects enter post-2026, pricing pressure will increase, but the market is unlikely to experience the aggressive compression seen in Romania or Greece. Serbia’s structural deficit of renewable capacity suggests that PPAs will remain seller-favourable for several years.
In regional comparison, Serbia sits between scarcity-driven systems and oversupplied solar markets. This hybrid position gives Serbian PPAs a distinct character: higher prices than Romania, lower volatility than Greece, and cleaner economics than Bulgaria. For both producers and industrial buyers, this makes Serbia one of the most rational PPA markets in Southeast Europe in 2025, not because it is cheap, but because it is predictable.
Elevated by virtu.energy