Montenegro’s renewable energy sector is entering a new phase of development, supported by a growing pipeline of wind, solar and energy storage projects capable of attracting long-term investment. However, the country’s first solar auction demonstrated that a strong project pipeline alone is not enough to guarantee successful implementation. After all applications submitted under the inaugural 250 MW solar auction failed to meet the required legal and technical standards, the Ministry of Energy, with support from the European Bank for Reconstruction and Development (EBRD), is redesigning the tender framework. The deficiencies were linked primarily to documentation, spatial planning compliance and grid connection requirements rather than insufficient market interest.
The revised auction mechanism remains a central element of Montenegro’s renewable energy strategy. Under the government’s programme for 2026-2028, authorities plan to tender 450 MW of new renewable capacity, consisting of 250 MW of solar and 200 MW of wind power. Successful developers will be awarded 12-year two-way Contracts for Difference (CfDs), providing greater revenue certainty while helping reduce financing costs. Nevertheless, the long-term success of the programme will depend on thorough verification of land ownership, permitting status and grid connection readiness before projects are allowed to participate in competitive auctions.
Outside the auction programme, several large-scale renewable developments continue to make progress. Wind Europe MNE has begun the environmental impact assessment process for the 92.4 MW Njegovudja wind farm near Zabljak. The project will consist of 14 wind turbines, each with a capacity of 6.6 MW, together with a new 110 kV transmission connection. Meanwhile, the 88 MW Korita wind project near Bijelo Polje has secured a grid connection agreement with CGES and is expected to require approximately EUR 132 million in investment, with commercial operations planned for 2030. The project previously experienced delays after construction permits were denied due to the absence of a grid connection agreement, highlighting the importance of proper regulatory sequencing during project development.
One of the strongest investment signals in Montenegro’s renewable sector comes from the joint venture between EPCG and Masdar, established on a 50:50 ownership basis to develop up to 2 GW of renewable generation and energy storage capacity. The first development package includes the 140 MW Stedim solar project and the 50 MW Krupac solar plant, alongside feasibility studies for more than 400 MW of pumped-storage hydropower. The integration of storage will play a crucial role in balancing future solar generation, reducing renewable curtailment during periods of high production and shifting electricity to higher-value market periods while supporting exports through Montenegro’s electricity interconnection with Italy.
International renewable energy developers continue to strengthen their presence in the Montenegrin market. French renewable energy company Qair has secured a construction permit for the 50 MW Rudine solar power plant near Niksic, which is expected to generate approximately 73 GWh of electricity annually. The company also reports an additional 250 MW of projects that have already obtained planning and technical approvals, while a further 70 MW remains in the permitting process. Qair’s cooperation with EPCG provides an additional pathway for renewable project development outside the government auction framework.
Montenegro is simultaneously investing in electricity transmission infrastructure to accommodate future renewable capacity. Transmission system operator CGES has secured a EUR 25 million loan from the French Development Agency (AFD), backed by a state guarantee, to modernise the 220/110 kV Perucica substation and upgrade the 400/220/110 kV Pljevlja 2 substation. The investment is also expected to receive an EUR 8.5 million grant from the European Union. The Perucica upgrade is intended to facilitate the integration of up to 350 MW of hydropower, while improvements at Pljevlja 2 will strengthen Montenegro’s position within the Trans-Balkan Electricity Corridor and support the country’s gradual transition away from coal-fired electricity generation.
Taken together, Montenegro’s expanding portfolio of wind, solar and storage projects, combined with the EPCG-Masdar partnership and the government’s auction programme, represents a renewable pipeline that already exceeds the country’s current electricity demand. This shifts the investment focus toward grid integration, export capability and system flexibility rather than simply adding generation capacity. Future project financing will increasingly depend on detailed assessments of transmission constraints, curtailment risks, connection timelines, balancing costs and future grid reinforcement requirements instead of relying solely on assumptions regarding electricity prices or unrestricted network access.
As renewable deployment accelerates, the differences between wind and solar generation will become increasingly important from both technical and commercial perspectives. Projects such as Njegovudja and Korita are expected to deliver higher capacity factors while producing a greater share of electricity during winter months and overnight periods, giving them greater strategic value within Montenegro’s electricity system. Solar projects, although generally quicker and less expensive to construct, remain more exposed to declining wholesale prices during periods of abundant midday generation. Consequently, Montenegro’s most resilient long-term renewable portfolio will rely on a balanced combination of wind, solar, hydropower, pumped storage and battery energy storage systems operating within a coordinated transmission and dispatch framework, rather than treating each renewable project as an independent grid connection.
