Energy system in Serbia, from exploitation of primary energy sources transformations in electric power plants and district heating plants, energy (electric and heat) transmission and distribution to final users, is faced with a number of irrational and in efficient behaviors and processes. Those are consequences of the old technologies in use, old equipment at the end of their life time, bad exploitation of the equipment in use, wrong energy strategy in the past, un suitable energy price policy, as well as delayed refurbishment of the equipment and delayed implementation of the modern technologies. Structure of the industry, developed after the World War II also contributed to a high specific use of energy per unit of production. Paper gives a short review of the present status of energy system in Serbia with special emphasis on the energy efficiency, renewable energy sources use and import energy dependence. Main part of the paper is devoted to the activity of the National Energy Efficiency Program (NEEP), founded by Ministry of Science and Environmental Protection. A program started in 2002 and in the period up to 2005, 140 R&D&D projects and 25 feasibility studies have been financed. The main aim of the NEEP is to combine research and engineering activities in order to research, demonstrate, and implement modern efficient technologies and equipment, engineering and management methods, as a tool for increasing energy efficiency and promotion of renewable energy sources. The intention was also to coordinate all activities, from the choice of the priorities, selection of the best projects proposed, up to the control of the realization of the projects financed. Review of the priorities chosen in the period 2002-2005 is also presented. NEEP engaged the most experienced researchers from scientific institutes and faculties, and engineers from industry, but implementation of the results was not successful. Main reasons can be identified as: industry and agriculture municipal and local authorities presently are not in an economic situation to in vest money in new equipment and modern technologies in order to increase energy efficiency; energy and fuel prices do not stimulate rational and efficient use of energy; favor able environment for rational and efficient behavior of the people and companies was not created by governmental policy.