The energy sector in Montenegro

With around 650 000 inhabitants, Montenegro's electricity needs are currently satisfied by just one 210 MW coal power plant at Pljevlja (around one third of electricity), and hydropower plants (the remaining two thirds).

Hydropower comes mainly from the 307 MW Perucica and 342 MW Piva plants, with the remainder from other much smaller hydro facilities. New forms of renewable energy are hardly used at all in the country, despite significant potential in some regions.

Montenegro has no infrastructure for natural gas distribution and does not currently extract oil, though the government is interested in oil and gas production in the Adriatic Sea.

Declining electricity imports

Until 2009 Montenegro imported significant amounts of electricity. However since 2010 this deficit has closed due to the decline of the KAP aluminium plant, which has at times accounted for up to 40 percent of the country's electricity consumption, but is now languishing bankrupt. Having such a large and unpredictable customer makes predicting energy needs in Montenegro notoriously difficult.

Plans to become an electricity exporter

This has not deterred Montenegro's government, however. As well as refusing to accept that KAP might never work at any significant capacity again, for several years it has been busy trying to remodel the country as an electricity exporter.

During the Berlusconi era the Montenegrin government made deals with Italy to construct an undersea electricity cable between the two countries and selected Italian company A2A as shareholder and manager of state-owned electricity generation company EPCG.

Planned capacities conflict with EU requirements

In July 2014 the Montenegrin government approved a new energy strategy for the country, which continues the focus on exporting electricity. The strategy runs until 2030, by which time, if all goes to plan, Montenegro should be well settled into the EU - it hopes to join in around 2020.

Yet the plans laid out in the strategy may prove difficult to square with EU climate and nature protection requirements. The cornerstones of the strategy are the construction of three large new energy generation facilities - all of these are controversial:

The Pljevlja II coal power plant (220-250 MW) because of its health and climate impacts, as well as the existing legacy of ash waste and water pollution from the existing plant. Constructing a new plant would increase Montenegro's CO2 emissions in an era when it should be significantly reducing them.

Moraca and Komarnica hydropower plants (238 MW and 168 MW respectively) both threaten valuable natural areas.

Analyses and research on the Moraca dam project predict permanent destruction of very rare and endemic fish and bird species as well as downstream impacts on Skadar Lake, which is recognised as an international (RAMSAR, potential Natura 2000, proposed Emerald site) and national (National Park) protected area.

The Komarnica valley is also nominated as an Emerald and Natura 2000 site and includes the unique Nevidio Canyon, which is protected as a Natural Monument.

Energy efficiency potential

As well as questionable need for more electricity due to declining industrial demand, Montenegro has huge potential for reducing demand through more efficient energy use.

According to Eurostat, Montenegro's energy intensity by gross inland consumption of energy is 3.3 times higher than that of the EU-28. This is, among other things, due to the widespread use of electricity for heating. There is significant scope for changing this situation with the use of district heating in urban areas, and expanding the use of efficient forms of biomass heating, provided it is locally and sustainably sourced.