Montenegro is facing increased import risks as hydro production weakens, increasing the value of investment in wind, solar and storage. For EPCG and private developers, the emerging commercial model is a portfolio of generation, storage and cross-border options rather than replacing hydro with solar. The project pipeline is beginning to diversify risks associated with weaker hydro production.
Energy Community monitoring showed electricity exports from Montenegro to Italy were around 80% higher in Q3 2026 than in Q3 2025, despite the introduction of CBAM-related costs on Western Balkan electricity. The submarine interconnector provides another route to buy deficit energy and sell surplus power, a strategic advantage that many Western Balkan markets do not have. The export increase shows that the cable can create value when Italian prices and regional spreads are sufficiently attractive.
Montenegro has advanced new wind and solar projects, including Korita and Tupan, while Gvozd remains central to EPCG’s wind strategy. The broader project pipeline increasingly includes storage or hybrid configurations. Standalone solar projects without flexibility face capture-price and curtailment pressures already visible in Greece.
Reservoir hydro can act as natural storage, wind can diversify seasonal production and batteries can manage shorter-duration fluctuations. The Italy cable can monetise surplus generation or cover deficits, while improved rainfall would ease near-term import exposure. Reservoir hydro, wind, solar, storage and cross-border access can reduce dependence on any single seasonal outcome.
The next step identified for Montenegro is deeper market coupling with Italy. Coupling would improve cross-border capacity allocation and could give Montenegrin renewable generation more efficient access to Italian demand. It would also expose Montenegro more directly to Italian and EU price formation, increasing the importance of balancing and hourly delivery profiles.
