Montenegro’s electricity sector recorded a sharp recovery in 2026, following a year in which reduced domestic generation contributed significantly to weaker economic performance.
Output of electricity, gas and steam increased approximately 95.4% year on year in the second quarter of 2026, contributing to an overall increase of roughly 20% in industrial production. The scale of the increase is partly linked to the exceptionally low comparison base established in 2025. State-owned power producer EPCG recorded a €92.1 million loss in 2025, after a prolonged outage at the Pljevlja thermal power plant and unfavourable hydrological conditions reduced domestic electricity availability and increased reliance on imported power.
Financial performance subsequently improved substantially. EPCG reported €53.4 million in EBITDA and €36.5 million in net profit in the first quarter of 2026. The contrasting results illustrate the strong impact that hydrological conditions and the availability of major generation facilities have on Montenegro’s electricity system.
Lower hydro availability combined with the absence of Pljevlja can rapidly increase the country’s dependence on external electricity supplies. Conversely, improved conditions can produce very large year-on-year increases in domestic generation.
Generation concentration remains a structural feature of the system. Montenegro has significant renewable energy resources, but hydroelectric output remains dependent on rainfall, while the Pljevlja thermal plant continues to have strategic importance during the energy transition. EPCG is therefore advancing investments in solar, wind and battery storage, alongside other generation projects.
The company’s investment programme includes solar installations, the Gvozd wind project, the Perućica expansion and battery storage. The improvement in 2026 provides stronger operating cash flow for capital expenditure while EPCG continues developing those projects. The electricity sector’s recovery follows the disruption experienced in 2025, with the expansion of solar, wind and storage capacity forming part of the investment programme intended to diversify Montenegro’s generation portfolio.
