During the following decade Montenegro has the potential to be transformed from a large importer of energy, which imports up to 50 percent of its production, into a country whose production can meet domestic needs.
The amount of electricity for export can reach up to 2,000 GWh in 2024, in case the aluminum factory KAP stops working. This is a very significant amount, if one takes into account the total demand in the country (between 4,000 and 5,000 GWh in 2024).
This situation could lead to a significant dependence on the export market. The analysis has demonstrated the possibility for Montenegro to compete with other countries in the region for export markets in adjacent countries. The competition could come from EU Member States, Bulgaria and Romania, and in the near future and from Ukraine and Turkey as well.
High dependence on export markets suggests the possibility of losing the funds invested in projects. From this point of view, decision-making “produce or purchase” should be accurately considered before entering into new investments.
Regarding the analysis of supply and demand during peak workloads is expected that Montenegro remains vulnerable in this respect, even if KAP stops working.
There are numerous problems related to the supply. Montenegro has a high dependence on hydropower, which will not be changed in the future.
It is interesting that the production of electricity in hydroelectric power plants is historically unstable. Thus in 2010, 2.7 terawatt-hours were produced in hydroelectric power plants, while in 2011 only 1.1 terawatt-hours were produced. This can be a major problem in the case of a longer period with little rainfall.
The capacity expansion will not take place without problems. When it comes to Pljevlja I, it seems that there are legal limitations arising from the Decision of the Ministerial Council of the Energy Community related to the implementation of the Directive on large combustion plants, which limits the maximum working hours in the period between 2018 and 2023 and predicts subsequent provision of production standards. In addition, there may be economic limitations. In the case of hydroelectric power plant Morača, the tender announced in 2011 was unsuccessful, allegedly because the project had proved economically unviable.
The gradual closure of the factory KAP can significantly reduce the demand for electricity in the country.
The total loss in transmission and distribution of electricity is around 23 percent. Increasing grid performance may have an impact on supply security as well on country’s position, without the addition of new production capacities.
The report shows that the country does not have good regional connections in the field of energy policy.
The decision whether to purchase or produce electricity must be strategic and must take into account the consideration of energy security.