The Tupan solar power plant near Nikšić has received full environmental and construction clearance, marking a significant step in Montenegro’s renewable energy landscape. Developed by the Podgorica-based company S2P Tupan, the project boasts an installed capacity of 90 MW, positioning it as one of the largest solar installations in the country.
Spanning approximately 156 hectares, the solar park is strategically located in the Nikšić plateau, an area recognized for its favorable irradiation conditions. The project will utilize over 129,000 photovoltaic modules, which will cover about 56% of the site, indicating a high-density configuration typical of modern solar installations in Southern Europe.
The Tupan project is part of a broader shift in Montenegro’s energy strategy, moving from pilot-scale deployments to substantial infrastructure projects. With an annual electricity generation of around 3 TWh, the addition of a 90 MW solar plant is expected to diversify the energy mix, reducing reliance on hydropower and imported electricity during periods of low rainfall.
This initiative aims to enhance the share of renewable energy within the national grid while mitigating risks associated with hydrological variability. Additionally, it is anticipated to improve export capabilities during peak solar generation periods.
S2P Tupan was established as a special-purpose vehicle in 2023 and is backed by private investors and Swiss-based S2P Electric. This ownership structure reflects a common model in the Western Balkans, combining foreign technical expertise with local execution capabilities while adhering to EU environmental standards.
The recent issuance of a “green permit” indicates that the project has successfully completed its Environmental Impact Assessment (EIA), land-use compliance, and grid integration requirements. This milestone allows the project to progress into engineering, procurement, and construction (EPC) structuring and financing negotiations.
While specific capital expenditure (CAPEX) figures have not been released, similar projects in Southeast Europe indicate utility-scale solar CAPEX ranges between €0.55 million and €0.75 million per MW. This suggests a total investment value for Tupan could fall between €50 million and €70 million, depending on various factors such as grid connection scope and configuration type.
Current power purchase agreement (PPA) benchmarks in the region suggest potential pricing between €60 and €90 per MWh. Consequently, the project could yield an equity internal rate of return (IRR) ranging from 9% to 13%, with possibilities for higher returns linked to export pricing strategies.
The Nikšić region is developing into a renewable energy hub due to existing transmission infrastructure and its proximity to hydroelectric facilities. However, challenges remain regarding grid absorption capacity and potential curtailment during peak generation hours. Addressing these issues will be crucial for maximizing the project’s output and efficiency.
The Tupan solar plant exemplifies significant changes within Montenegro’s energy sector: a transition from state-led initiatives to private sector-driven renewable energy deployment; the development of bankable solar projects; an increasing focus on export-oriented generation; and a foundation for integrating hybrid solutions such as battery storage into future energy strategies.
With its recent approvals, the Tupan project positions Montenegro to enhance its renewable energy capabilities significantly, transforming it into a competitive player in regional electricity markets.
