In this year, preferential electricity producers earned EUR 17.9 million from the sale of electricity at subsidized prices. That is 2.3 million or about 11% less than they would have earned if they had sold electricity on the market, according to data from the Montenegrin Electricity Market Operator (COTEE). They could sell electricity on the market for EUR 20.2 million.
Currently, there are 23 favored producers in the incentive system, while three companies left the incentive system at the beginning of the year. The companies in question are Hidroenergija Montenegro, BB Hidro and Viridi Progresum, which manage a total of ten mini-hydroelectric power plants (MHP). Those companies left the incentive system precisely because they can sell electricity on the market at a price higher than the incentive price.
Years ago, this was not the case, but the incentive price of electricity was significantly higher than the market price. However, from September 2021, the price on the market starts to rise and has reached incredible values. Last year, the incentive price was around 92 euros per megawatt-hour, which was almost two times less than the average market price. The incentive price is adjusted annually by the inflation rate from the previous year. Last year, inflation was around 17%, which means that the incentive price is now over 100 EUR per megawatt-hour.
Favored producers, when they decide to leave the incentive system, must be on the market for at least one year. They have the right to incentive prices for 12 years from the beginning of receiving that status.
According to COTEE data, the company Krnovo Green Energy received the most money from the sale of electricity this year. Owners of wind power plants (WE) in Krnovo earned EUR 8.2 million this year, while on the market, according to COTEE data, they would have received EUR 386.3 thousand more.
Možura Wind Park, which manages wind farms on Možura, earned 4.4 million, which is 1.07 million less than it would have been if they had sold electricity on the market.
MHE Vrbnica earned 845.8 thousand, or 349.3 thousand less than they would have earned on the market. Small hydro power Mojanska earned 863,000 euros from the sale of electricity, which is 71.6 thousand less than the income they would have earned on the market, while Kronor earned 830.2 thousand euros from the sale of electricity.
Due to remaining in the incentive system, they remained “short” by 186.6 thousand euros. Hidro Bistrica earned 650.2 thousand euros, which is 133.6 thousand less than they would earn on the market. Igma energy earned 389,000 euros this year, but unlike the previous companies, they would earn 17,000 euros less on the market than through the incentive system. Of the 23 privileged producers, 14 of them would have earned more income if they had sold electricity on the market, while nine of them received more money through the incentive system.
Citizens and the economy have been paying incentives for the owners of MHP and VE since 2014, when the first mini-hydroelectric plant in Montenegro started operating. Businessmen close to the DPS and the long-time president of the state and that party, Milo Đukanović, were mostly engaged in this business. His son Blažo Đukanović is among the owners of MHE. Mlađi Đukanović is a co-owner of the company BB hydro, which received the status of a privileged producer in the middle of 2020, and decided to exit the incentive system at the beginning of this year. Privileged producers can once in 12 years, for which their privileged status is determined, leave the incentive system, be out of it for a minimum of one year and, if they wish, return to the incentive system.
On an annual level, the state, the economy and citizens have always given millions of euros so that privileged producers would receive more money than would have been the case if they had sold electricity on the market. Concession contracts are for 30 years, after which MHP and VE remain with the state.
Sign up for business news updates & special reports.
