Montenegro’s state-owned utility, EPCG, is enhancing its commitment to renewable energy by signing a new agreement with German turbine manufacturer Nordex for the second phase of the Gvozd wind farm project, located near Nikšić. This agreement marks a strategic shift towards a multi-phase renewable energy platform as Montenegro seeks to diversify its energy generation away from coal dependency.
The initial phase of the Gvozd wind farm, which is currently under construction, has an installed capacity of approximately 55 MW. The upcoming expansion is projected to increase the total capacity of the site to between 75 MW and 80 MW, depending on the final configuration of turbines and integration with the grid.
This partnership with Nordex builds upon an existing collaboration where the company is responsible for supplying turbines, managing installation, and providing a long-term maintenance contract spanning 25 years. The first phase utilizes high-capacity turbines in the 6–7 MW class, reflecting a regional trend towards larger turbine models that maximize output in limited space.
Financially, the Gvozd project is structured as a phased investment. The initial development phase is estimated to cost around €80 million to €85 million, while the second phase is expected to require an additional €20 million to €30 million. This brings the total investment for both phases to over €100 million, with funding primarily sourced from multilateral institutions. This approach allows EPCG to expand its capacity while maintaining financial flexibility amid ongoing investments in solar and hydro projects.
The phased development strategy minimizes execution risks and enables shared infrastructure, such as grid connections and access roads, across different phases. This method aligns well with Montenegro’s permitting and financing landscape, where incremental growth tends to be more feasible than undertaking large-scale projects all at once.
Upon completion, the Gvozd complex is anticipated to produce between 150 GWh and 180 GWh annually, significantly contributing to Montenegro’s overall wind energy output. This project is crucial for reducing reliance on coal-fired power generation, particularly from the Pljevlja thermal plant, which faces increasing regulatory scrutiny and environmental challenges.
The agreement solidifies Nordex’s presence in Montenegro and enhances its footprint in Southeast Europe, where turbine suppliers are increasingly partnering with state utilities and local developers to establish long-term service agreements. Such extended maintenance contracts are becoming essential for ensuring project viability, especially in smaller markets where operational stability is vital for financing.
The expansion of the Gvozd wind farm occurs during a period of significant transformation in regional power markets. Increasing renewable energy contributions across Southeast Europe are beginning to influence pricing structures, with wind energy playing a larger role in determining marginal prices during peak generation times. Additional capacity from projects like Gvozd is expected to intensify this trend, exerting downward pressure on prices during windy periods while increasing market volatility.
Moreover, Montenegro’s integration into the Balkan power grid adds a regional dimension to this project. Excess energy generated during peak wind conditions can be exported to neighboring countries such as Serbia, Bosnia and Herzegovina, and Italy through undersea interconnectors, bolstering Montenegro’s position as a flexible energy supplier within Southeast Europe.
The decision to advance with the second phase of Gvozd reflects EPCG’s broader strategic shift towards becoming a diversified renewable energy developer. The utility aims to transition from its traditional hydro-thermal operations towards a focus on wind and solar energy sources. This transition is driven by both decarbonization goals and changing market dynamics that favor renewable energy over fossil fuels.
As construction progresses and financing for the second phase materializes, the Gvozd wind platform is poised to become one of Montenegro’s key energy assets, significantly impacting domestic energy security and enhancing the country’s role in an increasingly interconnected Southeast European power market.
