Montenegro finds itself at a key inflection point. The only coal-fired thermal power plant in the country, Yugoslav Thermal Power Plant Pljevlja (TPP Pljevlja), with an installed capacity of about 225 MW, has for decades been the backbone of domestic generation and is now scheduled for gradual shutdown. (OECD) Its decommissioning raises fundamental questions about how Montenegro will replace its domestic supply, manage growing intermittent wind generation, meet export potential and preserve cross-border import and balancing flexibility.
Domestic supply sources and the role of Pljevlja
TPP Pljevlja currently supplies a very significant share of Montenegro’s electricity production. Data indicate that coal-fired generation from this plant accounts for roughly 38 % of the national energy mix and remains the largest single domestic source. (OECD) At the same time, Montenegro’s nationally determined contributions envisage phasing out coal use in Pljevlja by around 2035 in one scenario. (UNFCCC) According to a draft strategic document the plant is slated for decommissioning by 2041. (vijesti.me) Thus, within the next decade to two decades Montenegro must either replace this generation capacity, import more power, or boost other domestic resources significantly.
Renewable capacity expansion: hydro, wind, private producers
Montenegro is richly endowed with hydropower potential. According to recent energy-sector reporting, hydropower has been the dominant renewable source, with large plants such as Perućica Hydroelectric Power Plant and Piva Hydroelectric Power Plant contributing large shares. (CEE Legal Matters) For wind energy, a major acceleration is underway. Existing wind farms such as Krnovo Wind Farm (72 MW) and Možura Wind Farm (46 MW) are already operational. (Trade.gov) A new project Gvozd Wind Farm (54.6 MW) is under development, expected to add around 150 GWh/year of output. (Early Warning System) These developments are further supported by Montenegro’s legal framework for renewables, including feed-in tariff and market premium incentives via the 2024 Renewable Energy Law. (Balkan Green Energy News) Private producers, independent power producers (IPPs) are increasingly active: the government paperwork notes the construction of ~20 small and medium size power plants by IPPs. (MIA)
From a supply-side perspective, if the coal plant’s output declines, growth in wind and hydro must compensate, both to maintain domestic self-sufficiency and to sustain any export ambitions.
Demand and export potentials
On the demand side, Montenegro is not a large electricity market. But it has had moments of being a net exporter thanks to its hydropower surplus; reports indicate that Montenegro has achieved periods where fully renewable supply was possible. (CEE Legal Matters) The export potential becomes more interesting if domestic supply remains robust and upgraded network and cross-border capacity allow it. However, shutting down the coal plant reduces the margin of inert, dispatchable capacity, and that introduces a risk to export potential unless renewables + storage or imports/back-ups are used.
Cross-border import options and balancing
Because wind generation is variable and domestic dispatchable capacity is threatened by the coal shutdown, Montenegro will increasingly rely on cross-border imports and regional trading for balancing. Import options allow the system to cope with hours of low wind or high demand. Balancing services will also be required more as wind penetration rises. The wholesale-market projection for Montenegro includes recognition that TPP Pljevlja’s phase-out (by 2035) will place pressure on supply security and that regulatory reforms to support RES deployment must come alongside trade and balancing integration. (aim.afry.com)
Managing volatile wind electricity
As wind becomes a major contributor, managing its volatility is critical. Wind output fluctuates hourly, daily and seasonally; it does not align neatly with industrial or household demand or conventional dispatch schedules. In the Montenegro scenario, the gradual coal exit increases the share of intermittent generation and reduces dispatchable slack. Therefore, grid operators and policymakers must build or plan for: improved forecasting, interconnection with neighbouring markets, storage (hydro-pumped, battery), demand-side flexibility, and commercial mechanisms for wind producers to hedge their output risk. As hydro has large flexibility potential in Montenegro, utilising hydro reservoirs to compensate wind swings will be a key strategy. Also, private RES producers will need mechanisms to stabilise their revenue and guarantee dispatchable backup—which ties into the cross-border balancing theme.
Strategic implications and key uncertainties
Montenegro faces several strategic axes: ensuring supply security, maintaining affordability of electricity (for households and industry), promoting renewables and meeting climate commitments, and capturing export potential. The decommissioning of the Pljevlja coal plant forces a transition: failure to replace or compensate for its output could lead to increased imports, higher electricity prices, and loss of export capability. On the other hand, successful ramp-up of wind and hydro, combined with strong interconnections and demand flexibility, could position Montenegro as a green-energy exporter in the western Balkans.
Key uncertainties include the pace of wind and hydro project delivery, the build-out of balancing/forecasting capacity, the regulatory environment (including renewables support, grid access, market rules), cross-border transmission capacities and the speed of coal-plant phase-out. If wind projects are delayed or balancing is inadequate, Montenegro may face periods of supply stress, higher import costs or underused export potential.
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