Draft amendments would shorten permitting timelines, elevate green power projects to public-interest status and give public buildings a larger role in the country’s energy transition.
Montenegro is preparing to accelerate the development of renewable energy projects as the government seeks to align its power sector more closely with European Union rules and attract private capital into solar, wind and storage.
Draft amendments to the Law on the Use of Energy from Renewable Sources would introduce a faster permitting track for selected projects, shorten environmental screening deadlines and give renewable energy schemes priority status in administrative procedures. The government has proposed changes that include mapping areas suitable for renewable energy development, designating accelerated development areas, and recognising renewable energy projects — including grid connections and energy storage — as being of prevailing public interest.
The move marks the latest step in a broader overhaul of Montenegro’s energy legislation. The country adopted its first standalone Renewable Energy Law in August 2024, a framework the Energy Community Secretariat said was aligned with the EU’s Renewable Energy Directive and designed to open the door to auctions, guarantees of origin, power purchase agreements and renewable energy communities.
Under the proposed amendments, renewable projects located in accelerated development areas would benefit from shorter deadlines for decisions on whether a full Environmental Impact Assessment Study is required. The standard deadline would be cut to 45 days, while a 30-day deadline would apply to smaller projects of up to 150kW and to the modernisation of existing facilities where no significant additional environmental impact is expected.
The draft also seeks to make renewable energy a higher priority across the public sector. State and local authorities would be required to ensure that public buildings use a higher share of renewable energy than private buildings, and new or renovated public facilities would be expected to integrate renewable energy production, green heating and cooling, and storage where technically and economically feasible.
For investors, the most important change may be the proposed designation of renewable energy projects as matters of prevailing public interest. In practice, this would give priority to the planning, construction and operation of renewable power plants, their connection to the grid and related storage facilities in permitting and environmental procedures. The approach mirrors the direction of EU energy policy, where the revised Renewable Energy Directive introduced shorter permitting timelines, renewable acceleration areas and a presumption that renewable energy projects, storage and related grid infrastructure are of overriding public interest.
The amendments would also reduce electricity distribution charges for renewable energy communities and jointly acting prosumers, in proportion to the extent that they reduce use of the transmission and distribution networks. That provision is intended to encourage decentralised generation and collective self-consumption, a segment that Montenegro’s 2024 law formally brought into the legal framework.
The reforms come at a sensitive point for Montenegro’s power system. The country has a small electricity market, with about 396,000 customers and annual demand of roughly 3,000GWh. Electricity production in 2024 fell 15 per cent from the previous year to 3,447GWh, largely because of weaker hydrological conditions, while the Pljevlja coal plant, Montenegro’s only coal-fired power station, has been undergoing rehabilitation to meet EU environmental standards.
That dependence on hydropower and a single coal-fired baseload plant has sharpened the case for diversifying the generation mix. Solar, wind and storage are increasingly being treated not only as climate policy tools but also as instruments of energy security, import reduction and industrial competitiveness.
Montenegro has already begun shifting from feed-in tariffs to more market-based support mechanisms. In July 2025, with support from the European Bank for Reconstruction and Development, the Ministry of Energy and Mining launched the country’s first renewable energy auction, covering 250MW of solar capacity. The EBRD described the auction as part of a wider programme to introduce competitive bidding, improve transparency and attract higher-quality private investment into the power sector.
The first auction process also underlined the difficulty of turning legal reform into bankable projects. The initial tender was later cancelled after none of the bids met the prescribed requirements, including conditions linked to documentation, spatial planning and grid-connection qualifications. A new three-year incentive plan envisages a 250MW solar auction and a 200MW wind auction, with supported projects expected to come online closer to the end of the decade.
Investor interest, however, appears to be building. In January 2026, Montenegro launched a Renewable Energy Sources Association with EBRD and EU support, bringing together wind and solar developers including Alcazar Energy, Qair Group and Simes. The association is intended to give investors a more unified voice on issues such as grid access, balancing obligations, taxation and environmental procedures.
There are also signs of larger strategic interest in Montenegro’s renewables sector. State utility EPCG and Abu Dhabi’s Masdar have explored a joint venture targeting solar, wind, hydropower, battery storage and hybrid projects, with a view to meeting domestic demand and potentially exporting green electricity through Montenegro’s undersea connection to Italy.
The proposed amendments therefore sit at the intersection of three policy objectives: EU accession, investment mobilisation and energy security. Montenegro began EU accession negotiations in 2012, and the European Commission says all 33 screened chapters have been opened, with 16 provisionally closed. Energy-sector alignment remains a central part of that process.
Still, faster permitting is unlikely to be a complete solution on its own. Developers in the western Balkans often face overlapping constraints: grid capacity, land-use planning, environmental scrutiny, financing costs and administrative capacity inside permitting authorities. Designating acceleration areas may reduce project-by-project delays, but it also shifts more responsibility to the state to ensure that spatial planning, environmental screening and public consultation are robust at the mapping stage.
For Montenegro, the direction of travel is clear. The country is seeking to move from a renewables framework based largely on hydropower and legacy incentives towards one built around auctions, prosumers, energy communities, storage and clearer project pipelines. If implemented effectively, the amendments could make the permitting process more predictable and help convert investor interest into actual generation capacity.
The test will be whether the new accelerated procedures can shorten timelines without creating legal uncertainty. For developers, banks and industrial offtakers, the key question is not only whether Montenegro wants more renewable energy, but whether it can deliver a permitting and grid-connection regime reliable enough to finance it.
