Energy and Renewable Energy

The energy sector in Macedonia is undergoing a serious transformation. What until recently was primarily a technical and institutional topic has today become a matter of economics, investment, regulation, environmental protection and legal certainty. Renewable energy sources, photovoltaics, energy storage, energy communities and market integration are terms that increasingly appear not only among investors, but also among companies, municipalities, households and legal professionals.

In such an environment, energy can no longer be viewed in isolation.

Every new renewable energy project raises multiple questions: whether there is a possibility for grid connection, whether the land is suitable, whether all permits have been secured, what type of power purchase agreement is required and who bears the risks in the event of regulatory changes.

1️⃣ Why is energy one of the most topical issues?

The energy crisis in Europe shows that a stable electricity supply is not only a technical issue, but also a matter of national security and economic resilience. Macedonia, as a country that has historically relied on coal, hydropower and imports, must now accelerate the transition toward a cleaner and more flexible energy structure.

According to the latest data, domestic electricity production in 2025 amounted to 6,123 GWh. Renewable energy sources, including large hydropower plants, produced 2,839 GWh – representing an increase of 11.43% compared to 2024. This shows that renewable sources already play a significant role in the domestic energy balance.

Even more significant is the data on installed capacity. In 2025, renewable sources accounted for approximately 58% of the total installed electricity generation capacity. This means that the green transition is no longer merely a plan for the future – it is a process that is already reshaping the structure of Macedonia’s energy sector.

2️⃣ Photovoltaics: the fastest-growing segment among renewable sources

The most dynamic segment in recent years has been photovoltaics. In 2025, 1,458 photovoltaic power plants were registered, with a total installed capacity of 963 MW. Their production amounted to approximately 1,180 GWh, positioning solar energy as one of the most important sources of new green energy in the country.

The reasons for this growth are multifaceted:

• Macedonia has favorable climatic conditions for solar energy
• Technology is more accessible than before
• Companies are increasingly looking for ways to reduce electricity costs
• Export-oriented companies will increasingly need to demonstrate a lower carbon footprint, especially due to European climate policies.

However, the rapid growth of photovoltaics also brings serious challenges. Solar energy is variable – it produces the most during the day and depends on weather conditions. Therefore, every new project must be viewed not only as an investment in panels, but as part of a broader electricity system.

3️⃣ The grid – the biggest bottleneck

The biggest practical challenge in Macedonia’s energy sector is connecting new capacities to the grid. Interest in renewable energy sources far exceeds the current ability of the system to integrate all new projects.

According to audit findings, the Macedonian system can currently integrate approximately 1.5 GW of variable energy sources with the existing balancing reserves, while connection requests from renewable energy producers have reached 8.663 GW. Of these:

6.828 GW are photovoltaic power plants;
1.835 GW are wind farms.

This is a key signal for investors. Even when a project has a good location, financing and technical solution – without a secure grid connection, its implementation may be uncertain. Therefore, connection agreements, deadlines, grid upgrade costs and the possibility of production curtailment are becoming central issues.

4️⃣ New regulation is changing the legal framework

The new energy regulation aims to bring Macedonia closer to European rules and toward a more organized electricity market. The new Energy Law introduces important concepts:

• Annual planning of energy facilities;
• Energy storage;
• Energy communities;
• Active consumers;
• Clearer rules for grid connection.

This is particularly important for renewable energy, because investors seek predictability. A lawyer working in the energy sector must understand not only classic contracts and company registration, but also regulatory procedures, energy permits, land issues, public procurement, state aid and relations with grid operators.

In practice, legal risk can be just as significant as technical risk. If the project does not have properly regulated land, if the permits are not aligned, if grid connection is uncertain or if the power purchase agreement does not cover market risks – the investment may become disputed.

5️⃣ Energy storage and batteries

The next major topic is battery systems. Energy storage is becoming essential for greater integration of solar and wind capacities. Without batteries, the system may face production surpluses in certain periods and shortages in others.

In 2025, regulatory movement toward the licensing and integration of energy storage within photovoltaic power plants was observed for the first time. This will become increasingly important for new projects.

6️⃣ The energy market is becoming more dynamic

In 2025, 1,371 GWh of electricity were traded on the day-ahead market – 41% more compared to 2024. This indicates that the market is becoming more active, and companies will increasingly need to consider market prices, long-term contracts and protection against price risks.

In the future, power purchase agreements, or PPAs, will gain greater importance. They can be a valuable tool for companies seeking a stable price and green energy, but at the same time they require careful regulation of:

• Balancing responsibility;
• Guarantees of origin;
• Changes in law;
• Production interruptions;
• Carbon costs.

Conclusion

The energy sector in Macedonia is moving toward a new model: more renewable energy sources, more photovoltaics, a greater role for the market, a greater need for batteries and more complex regulation. The data shows that the green transition is already happening – but also that the system has serious limitations.

The main challenge is not simply to build more power plants. The main challenge is to create a stable, predictable and legally secure system in which renewable energy sources can develop without jeopardizing the grid, the market and the security of supply.

The future of Macedonia’s energy sector will therefore depend on three things: modern infrastructure, clear regulation and well-structured investments. Only with this combination can renewable energy sources become a true economic advantage – and not merely a regulatory obligation.

Note: This text is informative content, based on the applicable regulation and publicly available statistics in Macedonia, with the personal opinion of the author. The content should not, under any circumstances or in any case, be considered professional advice.