PROJECTS IN ENERGY SECTOR
Montenegro
Government of Montenegro
Montenegrin Investment Promotion Agency (MIPA)
Introduction
The Energy Sector of Montenegro is a mainstay of national economy, because of
favourable endowment of the country with energy resources as well as a recognized need
for advanced energy infrastructure as prerequisite for the development of other
prioritised branches of economy (e.g. tourism). The development of Energy Sector is
defined by Energy Development Strategy of Montenegro by 2025 (»Strategy«) which was
adopted in December 2007. The Strategy is a key strategic document which identifies
main investment needs and opportunities in the energy sector of Montenegro in the
observed period. The main objective set by the Strategy is to ensure sustainable, safe and
competitive supply of all energy sources together with energy efficiency measures and
increased utilization of renewable energy sources. Of primary energy sources in
Montenegro, brown coal, lignite, and firewood are produced, hydro-energy and industrial
wood wastes are used, but there is no petroleum and natural gas production.
Natural energy resources in Montenegro
Montenegro has a rich hydro-energy potential with a noteworthy index of costeffectiveness of investments and favourable conditions for integration into the ecological
and social environment. The estimated theoretical hydro potential on the main
watercourses totals 9,846 GWh, of which less than 1,800 GWh or only 17% is harnessed
at present. In addition to hydro-energy potential, coal is the most significant energy
resource in Montenegro. Coal reserves in Montenegro are located in Pljevlja area (184.5
million tons) and Berane basin (158 million tons, of which due to lack of exploratory
works in the past not more then 18.5 million tons is categorised under “exploitable”
reserves at the moment). In the last 10 years Renewable Energy Sources (RES) accounted
approx. 25% in total primary energy balance of Montenegro (Eurostat methodology),
which is about 3 times more than the EU average at the moment. Within this percentage,
the share of hydro varied in the range of 11.1-21.4% (depending on hidrologic
conditions) while the share of fuelwood and wastes amounted to 3.2-5.5%. In
Montenegro, approximately 45-50% of annually generated electrical energy is produced
from RES. Nevertheless, apart from larger and small hydro power plants, with some
rational investments, Montenegro could valorise much more unused but in the Strategy
identified potential of RES, such as: • wind energy (in several locations along the Adriatic
Sea and in the continental part around Nikšič); • solar energy (especially in the coastal
area where the number of sunshine hours is at the level of most attractive locations in the
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PROJECTS IN ENERGY SECTOR
Mediterranean zone: 2,000- 2,500 h/year); • biomass and plant waste (mainly in the
North, considering that Montenegro has an annual yield of wood between 850,000 m3
and 1,060,000 m3 ); • municipal solid waste (which in Montenegro amounts to 200,000 250,000 tons/year). Based on previously conducted research, the total petroleum core
potential (potential geological reserves) has been determined in two separate offshore
zones in Montenegro to the amount of 12.5 x 109 tons, i.e. 7 billion barrels of petroleum
and 425 billion m3 of natural gas reserves. Numerous complex and additional timeconsuming exploratory works are required to define commercial cost-effectiveness of
exploitation.
Projects
1. Name of the Project
Exploitation of coal in “Maoce” basin, Pljevlja municipality.
2. Description of the project
Maoce basin is located in the north-east part of Montenegro, with the air distance of 15 km
from Pljevlja. The Maoče Basin is located in the Neocene basin at an altitude of 880- 980
meters in the mountain area. An average annual precipitation (snow and rain) amounts to
900 mm. An average annual temperature is 7°C and there are 40-50 cold days (air
temperature below 0°C) during the year. The investors are expected to finance, open, exploit
and perform recultivation of the coal mine ‘’Maoče“, and to finance, build and operate the
Thermal Power Plant ‘’Maoče’’, as a single business entity.
The Project ‘’Maoče’’ refers to the exploitation of coal, conditioned by the construction of a
thermal power plant with an estimated capacity of 500 MW.
Coal reserves in the basin of Maoče are geological (123 million t) and exploitation (109.9
million tons). The annual production potential is 3,500 GWh.
3. Status of the project
• The Government of Montenegro will award a concession for the exploitation of coal from
the basin of Maoče and the construction of a thermal power plant of the estimated capacity
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PROJECTS IN ENERGY SECTOR
of 500 MW (2k250MW), based on the current reserves of coal and the thermal power plant
life cycle;
• The term of the concession contract is 45 years, with a possibility of extension in
accordance with the law;
• Concession fees for the exploitation of coal will be calculated as a percentage of revenues
from the sales of electricity;
• The proposed model of business operations is DBOMR (Design Build Operate Maintain
Recultivate).
Note: Regarding the energy sector, Montenegro is characterized by the radial structure of
the three voltages (400 kW, 220 kW and 110 kW) and connections with Kosovo (400 kW),
Serbia (220 kW), Albania (220 kW) and Bosnia and Herzegovina (over 400 kW, 220 kW and
110 kW overhead power lines). The new 400 kW transmission line to Albania is in
preparation. A submarine cable with the transmission capacity of 1,000 MW is planned
between Montenegro and Italy. Part of it is already built in Sumitomo electric factory in
Japan.
Energy sector features
Montenegro energy balance was featured by a significant shortage of electricity which
resulted in import of electricity.
Montenegro Energy Development Strategy until 2025 (mid-term scenario) estimates the
electricity consumption growth at the rate of 1.22% meaning that by 2025 the consumption
will reach around 5.800 GWh.
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PROJECTS IN ENERGY SECTOR
1. Name of the Project
Exploration and production of hydrocarbons in the waters of Montenegro (Oil and
Gas)
2. Description of the project
The Government of Montenegro in cooperation with Norwegian experts regulated the field
of research and production of oil and gas. In August 2010, The Law on the Research and
Production of Hydrocarbons was adopted (in full compliance with relevant EU directives).
Government may award a concession contract for exploration to one or more bidders; The
concessionaire is obliged to submit a report on the results of exploration to the Government
within six months from the date of completion of the works set out in the work plan; The
subject of the concession agreement for exploration may be the right to Geological,
geophysical or other detailed examination of the earth’s crust, except for drilling wells in
order to determine the structural and tectonic features of the environment and estimate the
presence of hydrocarbons; The production includes the operation of extracting
hydrocarbons from the reservoirs, their separation and the initial processing and
preparation of oil or gas for the production, transportation and storage, gas liquefaction at
the reprocessing facilities, as well as bringing the hydrocarbons to the terminal.
A large number of foreign companies expressed interest and willingness to invest in projects
of oil and gas in the Montenegrin coast.
3. Status of the project
First Bid Round– block with submitted bids
The Government of Montenegro has received bids from 6 companies to the Public Invitation
to Apply for Award of Hydrocarbons Production Concession Contract Offshore Montenegro
as of the deadline for submission of bids on 15 May 2014 until 15:00 UTC+1.
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PROJECTS IN ENERGY SECTOR
1. Name of the project
TAP-IAP (Ionian-Adriatic Pipeline)
2. Description of the project
Trans Adriatic Pipeline (TAP) is a gas pipeline that via Greece, Albania, the Adriatic Sea and
Italy's Puglia area enables transport of gas from the the Caspian region to Western Europe.
TAP will open the Southern Corridor gas supplies to Europe and will be open to all sources
of gas, not only for the supply of gas from the Azerbaijan's Shah Denis gas field. In December
2013, in Baku, Azerbaijan, final decision is made about investing in this project. Through
diversification of sources of gas supply, this project will improve the security of supply of
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PROJECTS IN ENERGY SECTOR
Europe. The Ministry of Economy delivered draft of feasibility study and accompanying
documents, as well as the draft study of impact on environment to relevant state institutions
and local governments for an opinion. The feasibility study will also include a proposal for
the development of the business model of the project.
3. Status of the project
Untill the end of 2014 is expected the definition of the necessary conditions for the
realization of the project (the region, financing, business model, and spatial planning
assumptions). Also, finishing a master plan for gasification of Montenegro.
1. Name of the project
Building of 2nd block of TPP Pljevlja
2. Description of the project
31st of December 2013, in the Ministry of Economy were publicly opened bids for the project.
9 companies submitted their bids. Companies from China: China Machinery Engineering
Corporation (CMEC), China Gezouba Group International Engineering Company (CGGC),
TBEA Shenyang Transformer Group Co.Ltd, Powerchina - Hubei Electric Power Survey &
Design Institute, China nationaly Electric Engineering Co. Ltd., CNEEC as well as companies
from Europe: Škoda Praha, Czech Republic; Istroenergo Group - IEG, Slovakia; Mixed
consortium of companies from Poland and rusata Overseas, Russia. The new unit shall have
power in the range 220-300MW, at location of the existing units of TPP "Pljevlja". The new
block will be constructed with the use of latest technology in compliance with the latest
requirements for environmental protection according to EU norms. The plan for the project
is implementation through an interstate agreement. The shortlisted are four companies:
Škoda Praha, Powerchina Hubei Electric Power Survey & Design Institute, Istroenergo
Group IEG Slovakia-SES Tlmace and China Machinery Engineering Corporation (CMEC).
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PROJECTS IN ENERGY SECTOR
3. Status of the project
Until the end 2014 signing of the contract with the best bidder is expected.
Ensuring spatial planning assumptions for the further implementation of the project, also
defining an institutional mechanism which thus enables the efficient implementation of the
project
between
RUP
and
EPCG.
Defining an interstate agreement and start of the project is expected at the same time.
1. Name of the project
HPP'S MORACA AND KOMARNICA
2. Description of the project
So far only about 20% of the total hydropower potential has been used.
HPP Komarnica - possibilities for investment in two power generators of 168 MW, with
annual production of 232 GWh. Overall investment is estimated at the level of some €182.8
mil. in 6 years.
HPP Morača - basic Technical Design encompases construction of four hydro-power
plants with total installed power of some 238.4 MW and an average annual generated
electric power of some 721 GWh. Small hydro power plants are up to 10 MW. Up to now,
concessions were awarded for 25 small hydro power plants. The subject matter of the
concession is the design, construction, exploitation and maintenance of small hydro power
plants at water courses. The duration of the concession shall be fixed for all water courses
and it shall be for 30 years. This period shall be calculated from the day of creating of all
necessary conditions for the issuance of urban planning and technical requirements.
3. Status of the projects
Regarding Moraca HPP research work is completed, detailed spatial plan, assessment of
environmental impacts for the project, which envisages four hydropower plants on the
Moraca River, as well as tender documents.
Up to now, concessions were awarded for 25 small hydro power plants. Tenders for streams
that have not been assigned during the previous tender procedures are expected during next
year.
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PROJECTS IN ENERGY SECTOR
1. Name of the project
Wind power plants Krnovo and Mozura
2. Description of the project
Wind farm on the site Krnovo / VE Krnovo installed capacity of 72 MW. The contract of lease
of land and construction of the wind farm at the site Krnovo (Municipality of Niksic, Šavnik
and Plužine) was concluded on August 5, 2010 with the consortium "MHI-IVICOM
Consulting GmbH"
Wind farm on the site Možura / Možura wind power capacity to 46 MW.
The contract of lease of land and construction of the wind farm at the site Možura
(Municipality of Ulcinj and Bar) was concluded on 5 July 2010 with a consortium of "Fersa
Energias Renovables" SA Spain and "Čelebić" DOO Podgorica.
3. Status of the projects
Issuance of building permits and the commencement of works are expected in next period.
For new investors there is opportunity to explore new locations.
1. Biomass potential
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PROJECTS IN ENERGY SECTOR
Estimate of energy potential of biomass is focused on the most important resources:
forestry, wood-processing industry residual, agriculture. According to this the main
biomass potential for generation can be represented with following proportion:
- forests and forested land 721,298 or 52.2% from total Montenegro area
- agricultural land 516,219 ha or 37.4% from total Montenegro area
* excluded from biomass potential 143,683 or 10.4%
10.40%
52.20%
Forests and
forested land
Agricultural land
37.40 %
Excluded from
biomass potential
Image 3: Estimate of energy potential
6.1.
Forestry
Forests and forested land are occupying an area of 721,298 ha and represent 52.2% of
total Montenegro area and represent the most significant energy potential for
Montenegro.
Image 4: Forests, storage of biomass in industry
There were 427 companies registered for wood-processing in the Commercial court in
2007. Forestry sector is especially interesting for the energy systems that use biomass as
a fuel.
Table 5. Area, wood mass, growth, forest status
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PROJECTS IN ENERGY SECTOR
Ownership
Area ha Wood mass m³
bdm
State forests and forested
land
Private forests and forested
land
Total:
Growth m³
bdm
Forest
status m³
bdm
551,015
62,233,000
1,255,000
942,489
170,283
8,407,000
176,000
176,695
721,298
70,640,000
1,431,000 1,119,184
According to the data in Table 5 it can be concluded that forest status is balanced in the
range of 78,20% from annual growth.
The most recent estimation of high and sucker government-owned forests shows a high
production potential of the most valuable forest lands in Montenegro.
Table 6. High and sucker government-owned forest areas, present growth, potential
growth
Ownership
High government forests
Sucker government
forests
Total:
Area ha
200,571
Present growth m³
Potential growth m³
bdm
bdm
By ha On total
By ha On total
area
area
4.98
998,843
9.03
1,811,156
35,703
2.19
78,189
6.5
232,069
236,274
4.56
1,077,032
8.64
2,043,225
Average weight – 1m³ = 0,7 t
•
The fact that on the most valuable forested land the growth of wood mass is 8.64
m³/yr shows that forests in Montenegro have higher, even double production and
energy capacity than they do today. This kind of non proportionality between
current status and future potential calls for use of the most efficient forest
technologies.
•
Wood biomass useful for energy generation can be estimated as a theoretical value
from the forest status presented in Table 5 in case that the whole roundwood is
processed in Montenegro, through primary or final processing.
6.1.1. Structure and quantity of wood biomass
Forestry biomass suitable for energy generation is presented in Table 7.
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PROJECTS IN ENERGY SECTOR
Table 7. Forest status, technical roundwood, space roundwood, forest residuals, tree
crust
Gross Technica
Space
Forest Tree
Total
forest l
roundwoo residual crust energygeneratin
Area
status roundwo
d
s
g biomass m³
od
m³
m³
m³
m³
m³
m³
t
bdm
Montenegr 1,119,1 447,673 458,865
167,878 44,7 671,51 402,29
o
8
6
0
0
4
7
Average weight – 1m³ = 0.7 t
Stumps and roots are not accounted for considering orographic conditions of
Montenegro forests.
6.2. Wood-processing industry
Wood-processing industry in Montenegro has 427 registered companies that during their
processes generate significant wood biomass.
6.2.1. Structure of residual from primary wood-processing
Table 8. Technical roundwood, commercial product, sawdust, large residual and the
rest
Area
Montenegro
Technical
roundwood
Commercial
product
m³
m³
447,673
246,220
Large
Sawdust
residual
m³
The
rest
m³
107,442
Total energy
potential
m³
m³
62,674 31,337
Additional residual (tree crust 14% from technical
roundwood)
Total residual
t
201,453
62,674
264,127
158,476
Average weight – 1m³ = 0.7 t
6.2.2.
Structure of residual from final wood-processing
Table 9. Secondary residual, final residual, other residual
Area
Cut wood
%
Commercial
product
Secondary
residual
m³
m³
11
Final
residual
m³
Other
residual
m³
Total
m³
t
PROJECTS IN ENERGY SECTOR
Montenegro 246,220
86,177
140,345
7,337
12,311 160,043 96,026
Average weight – 1m³ = 0.7 t
6.3. Main indicators of primary production of fast-growing types of trees for
energy use
Montenegro has good land condition for growing plantations of fast-growing trees that
can be used for energy generation. The most suitable areas for such growth are: the
lowest areas of Niksic flatland (Bara budoška i Slivlje); area on the riverside of river Donja
Zeta; area around Skadar lake (from Božaj to Karuča); area on the riverside of river Tara
(from Mataševo to river Bistrica in Mojkovac municipality); area on the riverside of river
Lim (from Murina to Brodarevo). Table 11. Location, area, generation
Growth m³/god
Location
Nikšić
Donja Zeta
Skadar lake
Tara
Lim
Total
Area ha
m³/g
Raw wood
Total
annual
t per year
1,500
-
-
-
400
-
-
-
10,000
-
-
-
500
-
-
-
1,000
-
-
-
13.400
50
670,000
455,600
Detailed feasibility study would be needed in order to give more information on the
possibility of growth of fast-growing plantations for energy use in these areas.
Image 6: Plantation of fast-growing trees
6.4. Agriculture
Main bioenergy resources from agriculture are viticulture and fruit-growing. The
agricultural land used for farming and growing wheat are not quantified cause they are
small and not concentrated in one area.
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PROJECTS IN ENERGY SECTOR
6.4.1. Viticulture
The cutting residuals from vineyards are traditionally burnt.
The study shows that one kilogram of residuals from grape trees equals the energy value
of one kilogram of fossil fuel. Therefore, the cutting residuals from vineyards can be used
for energy generation.
6.4.1.1.
Cutting residual
Table 12. Area, production of cutting residual
Subject
Area ha
Number of
grape trees
Kg of cutting mass per
grape tree
Total t
State-owned
2,310
8,914,298
-
-
Privately owned
3,000
9,252,013
-
-
Total
5,310
18,166,311
1.75
31,791
Source: Annual statistics 2009; Vineyards 13.jul. d.o.o. Podgorica
6.4.1.2.
Husk residual
Husk residual that is left over during production of liquor has a significant energy value.
Energy valorization of husk residual can improve general energy efficiency of grape
growing and wine making business.
Table 13: Amount of husk from grape trees, energy value
Subject
Number of
grape trees
Kg of husk per
grape tree
Total t/g of
husk
Husk
residual
t/g
Dry husk
residual
t/g
Privately owned
9,252,013
1.99
16,557
-
-
State-owned
8,914,298
3.21
27,432
-
-
18,166,311
2.61
43,989
35,100
15,795
Total
Source: Annual statistics for Montenegro 2009; own research
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PROJECTS IN ENERGY SECTOR
Image 8: Vineyards of “Plantaze 13. Jul” Podgorica
6.4.1.3.
Olive yards
Montenegro has a large number of olive trees. From the olive trees, specifically from the
process of oil making, a significant amount of mass can be collected that can be used for
energy value.
Table 14. Amount, energy value
Subject
Number of
trees
Total t/g
product
Kg per tree of
product
Husk t/g
Dry husk
t/g
Privately owned
429,900
2,401
5.7
2,089
1,044
State-owned
18,500
--
-
-
-
2,089
1,044
Total
448,400
2,401
5.7
Source: Annual statistics fro Montenegro 2009; own research
Image 9: Olives and olive tree, Ulcinj
6.5. Synthesis of bioenergy structure
Synthesis of bioenergy potential is presented by sectors in Table 15.
Table 15: Quantity and energy value by sector
Sector
Units
14
Quantity
t
Energy value
KWh/t
Σ GWh
PROJECTS IN ENERGY SECTOR
Forestry- 25% moisture
t
470,057
3,085
1,450
Wood-processing industry -12%
moisture
t
298,306
4,000
1,193
Forest cultured plantations- 25%
moisture
t
455,600
3,000
1,367
Residuals from viticulture -25%
moisture
t
31,791
3,000
95
Husk from grape trees -10%
moisture
t
15,795
5,500
87
Husk from olive trees -10%
moisture
t
1,044
5,500
6
Total
t
1,272,593
3,300
4,200
• Montenegroo bioenergy potential of 4.200 GWh is 1.5 times greater than the
current electrical energy production (2.800 GWh) which goes to show that the
green energy is the energy of the future.
7. Market
Wider use of biomass for energy use currently practically does not exist in Montenegro.
Some of the wood-processing industry companies use biomass for production of energy
for selfuse.
The residual wood from hardwood is traditionally used for heating in households in
heaters.
Small production of briquettes in some wood-processing companies is used in local
markets.
Significant use on the local market is expected with the increase in use of biomass for
energy generation (pellets, briquettes, electricity). In order for this to happen technology
transfer needs to happen first.
Considering that the need for energy from biomass from point of view of its price, green
energy, sustainability is increasing, the use of biomass energy on the local as well as
regional and wider markets in inevitable. This is the main condition for pushing the
biomass as energy product in the future.
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