Montenegro’s state-owned utility Elektroprivreda Crne Gore (EPCG) has launched a third tender for battery energy storage systems (BESS), underscoring both the urgency of grid stabilisation and the persistent execution challenges facing the country’s energy transition.
The latest tender marks a scaled-down, pilot-stage approach following two unsuccessful procurement rounds. The new call is valued at around €120,000, targeting a relatively small system with 100–130 kW power output and 200–260 kWh storage capacity, with bids due by mid-May.
This represents a sharp contrast to EPCG’s original ambition. The first tender, launched in 2025, envisaged two large-scale battery systems of 30 MW each and 120 MWh capacity per unit, implying a total storage capacity of 240 MWh and an investment envelope of approximately €58.8 million. That project was cancelled after the government withheld approval for debt financing.
A second, much smaller tender—valued at €75,000—also failed, attracting no bids, highlighting weak market appetite for pilot-scale deployments under the initial structure.
The third attempt therefore reflects a strategic reset. Rather than pursuing immediate large-scale deployment, EPCG is now testing battery integration through a modular, lower-risk pilot. The aim is to validate technical performance and operational integration before scaling up investment.
The underlying drivers remain unchanged. Montenegro’s power system is undergoing a rapid shift toward distributed renewable generation, particularly solar, following the rollout of prosumer programmes such as Solari 3000+ and related schemes. This has introduced new operational stresses on the distribution grid, originally designed for one-directional power flows.
Battery storage is increasingly seen as a critical tool to manage these dynamics. By storing surplus electricity during periods of high renewable output and releasing it during peak demand, BESS systems can stabilise voltage levels, reduce balancing costs and limit reliance on imports during high-price periods.
For EPCG, the economic case is also becoming clearer. Storage enables arbitrage between low-price and high-price periods, while supporting system flexibility in a market characterised by growing renewable penetration and price volatility.
However, the repeated tender failures highlight structural constraints. Financing remains a key bottleneck, particularly for large-scale storage assets that require upfront capital and regulatory clarity on revenue streams. At the same time, limited bidder participation suggests that market conditions—contract design, risk allocation or project scale—have yet to align with supplier expectations.
The shift toward a pilot project indicates a more cautious, phased deployment model. By testing technology on a smaller scale, EPCG aims to de-risk future investment decisions and build operational experience in integrating storage within its network.
In a broader regional context, Montenegro’s experience reflects a common pattern across South-East Europe. While the strategic importance of battery storage is widely acknowledged—driven by renewable expansion and system balancing needs—actual deployment remains uneven, constrained by financing frameworks, regulatory uncertainty and market design.
EPCG’s third tender therefore represents more than a procurement exercise. It is an early-stage attempt to bridge the gap between policy ambition and operational reality in the transition toward a more flexible, renewable-based power system.
