Montenegro’s Ministry of Energy and Mining plans to launch the first round of auctions for market premiums on solar energy projects by the end of June. This new incentive system aims to secure affordable electricity prices for citizens, improve supply reliability, and meet EU energy sector targets.
The incentives, established under the Renewable Energy Sources Law, will enable construction of solar power plants up to 250 MW and protect producers from market price fluctuations. Auction details are still being finalized and may change before the official announcement.
Supported by the EU, the Central European Initiative, Austria, and the European Bank for Reconstruction and Development (EBRD), the auctions will begin with a public call. Companies will have 2.5 months to submit documentation and financial bids. The Ministry will evaluate offers within 1.5 months, select winners, and finalize agreements. The auction follows a “pay-as-bid” model, where support matches the bidder’s price.
The government aims to provide predictability for investors, following similar models in Serbia, Romania, and Spain.
Minister Admir Šahmanović emphasized Montenegro’s transition from state subsidies to market-based support aligned with EU best practices. The country targets 50% renewable energy share in final consumption and 70% of electricity production from renewables by 2030. He noted 50 approved projects are currently stalled and hopes the auction system will stimulate investments exceeding one billion euros.
Legal advisor Miloš Laković explained the use of two-sided market premiums to protect producers: if market prices exceed the auction bid, producers pay the difference to the market operator (COTEE), and vice versa. Projects require urban planning permits, network connection agreements, and resolved property rights.
Economic consultant Vakhtang Kvekvetsia added that bid caps will prevent excessive offers, protecting the state. EBRD highlighted that the auction will increase transparency, foster private sector competition, and secure the best market prices.
