Montenegro: Until final negotiations with EnC TPP Pljevlja will not be shut down

, SEE Energy News

Coal-fired thermal power plant Pljevlja will not be shut down until the negotiations with the Energy Community (EnC) over the infringement report filed against Montenegro, because the plant has spent its allowed working hours, are concluded.

CEO of state-owned power utility Nikola Rovcanin said that the power plant was connected to the network after the Environmental Protection Agency issued a decision terminating the procedure for revoking the integrated permit, i.e. it acted upon the conclusion of the Government. The proceedings before the Energy Community are still ongoing. In essence, the procedure can last for two years, and until the final decision is made before the Energy Community, TPP Pljevlja can work, Rovcanin concluded.

On 20 April, the Energy Community Secretariat sent an Opening Letter to Montenegro to address its breach of the Large Combustion Plants Directive. In particular, the country’s sole thermal power plant Pljevlja, continues to operate despite the expiry of the limited lifetime derogation period of the plant. Following a written declaration not to operate a plant for more than 20,000 hours after 1 January 2018, the limited lifetime derogation (also known as opt-out) was granted to selected installations by the Energy Community Ministerial Council. It is an implementation alternative to complying with the maximum emission limits set by the Large Combustion Plants Directive. Following the expiry of the 20,000 hours, the plants can only remain in operation if they meet the (stricter) standards of the Industrial Emissions Directive. This is not the case for TPP Pljevlja.

If coal-fired thermal power plant Pljevlja were to close now, Montenegro would have to pay over 100 million euros a year for electricity imports. This is, among other things, shown by the analysis of the assessment of the financial effects of the possible shutdown of TPP Pljevlja made by state-owned power utility EPCG. EPCG considered two scenarios. According to the first one, the shutdown of TPP Pljevlja or the cessation of work from June this year to June 2022, would cost 155 million, while according to the second scenario, which envisages the cessation of work, from June 2021 to December 2022, the cost would rise to 234 million euros. Based on this analysis, suspension of TPP Pljevlja’s operation after the end of the regular annual overhaul in early June, would result in illiquidity of not only EPCG, as a majority state-owned company, but also all related entities in the energy sector: Montenegrin electricity distribution system operator CEDIS, Pljevlja coalmine, Montenegrin electricity market operator COTEE and other entities indirectly related to the energy sector, which could lead to economic and socio-economic collapse in Montenegro.