Over the next ten years, Montenegro has projected €2.5 billion in investments for the construction of additional renewable energy facilities for electricity production, primarily through private investments. However, the Action for Social Justice (ASP) has raised concerns over the lack of assessments regarding the impact on the state budget and electricity bills.
This investment plan, focused on large solar and wind power plants, is outlined in the draft National Energy and Climate Plan, which remains under public consultation for another ten days. According to ASP, this is a key strategic document for guiding the future of the country’s energy sector, but its adoption is already delayed by three years.
The plan projects a total of €1.5 billion in investments by 2030, and an additional €1 billion spread across 2024 to 2035 for power plants scheduled to operate after 2030. The financing sources include EPCG (the national electricity company), commercial banks, private investors, and the state budget.
ASP pointed out that, despite legal obligations, the draft lacks proper impact assessments on the budget. Instead, it simply states that the impact depends on prices and power purchase agreements awarded through auctions.
The Law on Renewable Energy, adopted last August, introduced a system of market-based premiums tied to power purchase agreements obtained via public auctions. The Ministry of Energy launched the first such auction this month.
Until now, private investors received subsidies, and the new market premium model essentially continues the trend of supporting private businesses. ASP previously reported that citizens paid around €95 million in subsidies to private electricity producers over the past decade.
The draft plan also notes that many projects are being developed by private investors and EPCG. While EPCG does not require financial support or government-backed purchase agreements, most private investors do, meaning state support will be necessary for part of the installed capacity.
ASP also criticized the absence of an assessment on how these large-scale investments would affect the development of the transmission network and the capital needs of the Montenegrin transmission system operator (CGES), whose costs are ultimately paid by consumers.
Even partial implementation of the planned renewable energy investments would increase CGES investments, which would be passed on to consumers through higher electricity bills. ASP stressed that the main national energy strategy should include an estimate of the impact on consumer costs.
The central event of the public consultation on this draft plan was held recently at the Chamber of Commerce, highlighting the potential for widespread impact on consumers and land use, as millions of square meters of Montenegrin territory could be covered with solar panels and wind turbines.
