Around €95 million in subsidies, excluding VAT, have been paid over roughly a decade until August last year to private companies operating mainly small hydroelectric plants (SHPPs) and wind farms (WFs), according to the Social Justice Action group.
These figures were provided by the Montenegrin Electricity Market Operator under the Law on Free Access to Information and are considered reliable by the group.
Subsidies have been paid since 2014, when the first private SHPP began operating, based on laws and regulations established during the rule of the Democratic Party of Socialists (DPS) and its allies. Public opinion generally views these regulations as harmful to consumers and highly favorable to well-connected tycoons and investors.
Most companies and individuals in this business are closely linked to the DPS leadership or their relatives, while ownership of the Krnovo and Možura wind farms is foreign.
The Možura project is reportedly shadowed by corruption allegations, and the SHPP and WF electricity production sector has become a prime example of a “captured” state system.
Subsidies grew from €80,000 in 2014 to over €21 million in 2021, with significant increases aligned with rising electricity prices on the European market. In 2022, subsidies were around €6 million, approximately €5.7 million in 2023, and about €7.5 million until August last year.
The business model involved granting 27 to 30-year production concessions, with subsidy rights for the first 12 years, mostly funded by electricity consumers or partly from the state budget.
Official data show 33 SHPPs were built under the subsidy scheme, mostly in the northern region, where locals have long protested environmental damage to rivers. Subsidies also cover two large wind farms, Možura and Krnovo, and several solar plants. The largest subsidies went to the two wind farms, which produce the most electricity.
In August last year, a new Renewable Energy Law was passed maintaining incentives for renewable energy production. Starting mid-2022, the then minority government issued dozens of urban-technical permits for large wind and solar farms.
The planned installed capacity of future wind and solar farms, which will cover millions of square meters of land, is nearly three times the current installed capacity of all electricity production facilities in the country.
Data indicate that many companies and individuals connected to the DPS plan to continue their energy sector business by building these large new capacities.
