Overview

Construction of the North Macedonia-Greece gas interconnector began July 9, 2025, with an estimated project duration of 22 months. The government signed a Memorandum of Understanding with Turkish company Kazanci Holding in July 2025 for development of a domestic gas distribution network and construction of an unspecified number of power plants to reach 500 MW in gas-fired power. Installation of photovoltaic and wind power energy capacities continued, although at a slower pace. The country intensified efforts for regional cooperation in electricity and gas supply but maintained heavy dependence on coal-fired power generation facilities – largely outdated and prone to malfunction. Import of minor quantities of non-Gazprom gas continued, enabled by a 2023 gas interconnection agreement with Bulgaria. In 2024, the government established a Ministry of Energy, Mining, and Mineral Resources, which assumed the authorities previously delegated to the Ministry of Economy. Parliament adopted an Energy Law in May 2025 that seeks to develop energy infrastructure, including the construction of renewable energy facilities. In September 2025, it amended an Energy Efficiency Law to establish minimum energy efficiency standards for buildings and to mandate certificates of compliance to reduce the impact of climate change. Further legislation on renewable energy and minerals that would regulate the use of renewable energy and sustainable exploration of mineral deposits remain pending. The National Electricity Market Operator (MEMO) is progressing towards electricity market coupling with Greece, and North Macedonia continues to harmonize its energy regulations with the EU energy standards. 

North Macedonia’s state-owned power company was unbundled and partially privatized in the early 2000s. Austrian utility company EVN has been responsible for electricity distribution in North Macedonia since entering the market in 2006. State-owned MEPSO (Electric Transmission System Operator of the Republic of North Macedonia) is the country’s electricity transmission system operator, while ESM (Elektrani na Severna Makedonija/Power Generation Plants of North Macedonia) is North Macedonia’s state-owned electricity producer.

The electric power production system in North Macedonia consists of two coal power plants with a total installed capacity of 825 megawatts (MW), several hydro power plants with a total installed capacity of 695 MW, one combined generation power plant of 287 MW, a heavy oil plant, solar power plants, a few biogas plants, and three wind power farms. The coal power plants produced 58 percent of the country’s annual electricity consumption in 2024. The smaller coal power plant, “REK Oslomej,” temporarily used during a 2021-2022 energy crisis, became inactive again in 2024 because of outdated energy generation capacities. ESM refurbished the “REK Bitola” coal power plant boilers in 2017, but its equipment is still largely outdated. There are two open pit lignite mines with a total capacity of 7 million tons/year and estimated reserves of 10 – 15 years. Domestic lignite has low-caloric value, and the government has announced plans for gradual closure of the REK Bitola power plant and the coal mines. Despite some investments in regular maintenance and minimal modernization, domestic production of electricity decreased by more than 25 percent over the last ten years. Total annual production of electricity in 2024 was 6,129 GWh, 6.5 percent less than in 2023, accounting for 89 percent of total domestic electricity needs. North Macedonia is a full member of the Union for the Coordination of Production and Transmission of Electricity European Interconnection (UCPTE), which ensures interconnection compatibility with European electric power systems.

The previous government cancelled a concession to the Greek consortium consisting of state-owned Public Power Corporation (PPC) and private company Archirodon Group to construct the 333 MW Chebren hydro power plant (HPP) and a new tender for its construction is yet to be announced. The potential investment, estimated at over $1 billion, could be a key component for developing a more diversified electricity system.

ESM owns and operates North Macedonia’s 36.5 MW wind park in the southern part of the country, and two private companies own another combined 45 MW in wind parks. ESM plans to increase capacity of its existing wind park by 14 MW and invest in another 50 MW in the same area. The government also awarded a concession for a 500 MW wind park project to Alcazar Energy, a Dubai based developer now owned by China’s Three Gorges South Asia company.

A natural gas transportation pipeline operated by the gas transmission system operator NOMAGAS carries Russian gas from the Bulgarian border to Skopje. Historically, Gazprom provides nearly 100 percent of the gas delivered through the pipeline, with the exception of negligible quantities since 2023. The pipeline primarily supplies industrial users in the cities of Skopje, Kumanovo, and Kriva Palanka. NOMAGAS was established on December 14, 2022, when National Energy Resources (NER), the company established by the government to develop an internal gas distribution network, officially merged with gas Transmission System Operator Gas Macedonia (TSO GA-MA). NOMAGAS took over the efforts to build natural gas interconnections with Greece, Serbia, and Kosovo.

ESM, together with private partners, constructed a 10 MW photovoltaic power station next to the coal power plant Oslomej in the western part of the country, which became operational in the summer of 2022. The European Bank for Reconstruction and Development (EBRD) approved a loan of €5.9 million ($7 million) for the project, with ESM financing the remaining €1.1 million ($1.3 million). In a competitive process, the government signed contracts with two foreign investors (Turkish and Bulgarian) for construction of 80-100 MW of photovoltaics at the site in Oslomej, however neither are operational yet. In addition, the government signed contracts with private investors to install 35 MW of solar on state-owned land and 21 MW on private land, committing to paying a premium tariff of €460,000 ($543,000) over the next 15 years. 

A 213-km oil pipeline with a capacity of 2.5 million tons per year connects oil storage facilities at the Greek port of Thessaloniki with local company OKTA’s aging oil refinery outside Skopje. The pipeline and refinery have only been used for storage since 2013. Negotiations between the government of North Macedonia and Greek company Hellenic Energy, formerly known as Hellenic Petroleum, for re-opening the dormant oil pipeline are ongoing. OKTA primarily operates as an oil trader in North Macedonia.
 

Opportunities

North Macedonia welcomes investments in the energy sector. The government invites companies to design, build, and operate new wind, solar, and biogas farms. The government also welcomes foreign investments in constructing gas-fired power plants. ESM is interested in upgrading some equipment at the “REK Bitola” coal power plant. In addition, the government is exploring the possibility of extending concessions for building small-scale hydro power plants along rivers across the country.

The government intends to further increase solar energy capacity from the current 848 MW to 1,500 MW. It also expanded the net metering system, allowing households to install solar panels on their residences up to 10 KW and produce electricity for the grid. There are also opportunities to promote more efficient use of electricity through home insulation and installation of more efficient heaters and electromechanical devices.

The government is expected to replace the dormant heavy oil-fired “TEC Negotino” power plant with a new gas-fired power plant. Several municipalities around the country are planning to develop a gas distribution network and have already established public enterprises in charge of gasification. The city of Strumica has a basic gas network, importing compressed gas from Bulgaria by truck. The government is also looking at options to connect the domestic network to alternative supply sources such as the Trans Adriatic Pipeline (TAP), the liquefied natural gas (LNG) terminal in Revithoussa, Greece, and the Floating Storage and Regasification Unit in Alexandroupolis, Greece.