Montenegro’s Ministry of Energy has officially cancelled its first solar power auction due to all bids failing to comply with necessary legal and procedural standards. The tender, initiated last year, was deemed invalid as submissions included outdated documentation and did not adhere to spatial planning regulations or grid connection criteria.
In response, the government is preparing to launch a revised tender framework that will encompass both solar and wind energy projects. This new initiative is part of a broader three-year incentive program slated for 2026-2028, which aligns with Montenegro’s EU Reform Agenda. The framework follows the recent enactment of the Law on the Use of Energy from Renewable Sources, which introduced a market-premium support system intended to replace fixed feed-in tariffs, thereby harmonizing Montenegro’s approach with EU guidelines.
The initial phase of this effort began in July 2025 when Montenegro attempted its first competitive bidding process for solar energy. This auction aimed to allocate 250 MW for solar plants exceeding 400 kW, with a maximum strike price set at €65/MWh and a market premium contract lasting 12 years. Under this arrangement, producers receive compensation when market prices fall short of their bid price, while any surplus revenue is returned to the state budget when prices exceed expectations. Despite 11 companies expressing interest by purchasing tender documents, only four bids were submitted, none of which met the qualification criteria.
The forthcoming program aims to establish technology-specific quotas and an auction calendar for renewable projects over the next three years. A new solar auction targeting another 250 MW is planned for the first quarter of 2026, followed by a wind auction offering 200 MW in the third quarter. Collectively, up to 450 MW of new renewable capacity will be eligible for market premiums during the period between 2026 and 2028. All future tenders will be location-neutral and administered by the Ministry of Energy in accordance with Montenegro’s National Energy and Climate Plan adopted in December 2025.
While the Ministry has yet to assess the fiscal implications of this new scheme, it has indicated that both subsidy expenditures and potential government revenues will vary based on future auction outcomes and prevailing market conditions. As projects under this initiative are not expected to commence operations until 2028, initial auction rounds have not been factored into medium-term budget forecasts. Officials remain optimistic that this model could enhance public finances and consumer welfare in the long run, drawing parallels with France’s experience where a comparable system reportedly contributed over €8 billion to its state budget during the energy crisis of 2022.
