Montenegro’s EPCG and Japan’s PowerX have signed a memorandum of understanding with an indicative target of about 500 MWh of battery energy storage system capacity in the country over an initial three-year period. The parties intend to coordinate storage with EPCG’s flexible hydro resources, expanding solar generation and regional electricity trading, rather than assess batteries as standalone arbitrage assets. The target is material for Montenegro’s relatively small power system.
Montenegro’s 2026 energy balance envisaged about 198 GWh of solar generation, while planning anticipated solar capacity reaching around 215 MW as prosumer and utility projects expand. Adding weather-dependent solar generation to a portfolio shaped by hydro inflows creates a need to manage output changes and maintain balance. Battery energy storage could help EPCG reduce imbalances across that portfolio.
Reservoir hydropower can shift large volumes of energy over longer periods, but it is constrained by hydrology and water management. Batteries can respond within seconds, absorb short-term solar surpluses and support intraday trading without changing water releases. Coordinating the technologies could preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable, while batteries manage shorter-term changes in supply and demand.
Regional connections and portfolio optimisation
Montenegro’s power system is connected to Serbia, Bosnia and Herzegovina, Albania and the Italy link. A battery could charge when the country has surplus power or imported electricity is cheap, then discharge to meet domestic demand or supply regional scarcity. Storage could therefore help manage imports and exports as well as local generation within a power system linked to neighbouring markets.
The commercial model should optimise EPCG’s overall portfolio rather than treat the battery energy storage system as an isolated profit centre. Its value should be assessed by its incremental contribution to hydro, solar, imports, exports and the company’s balancing position. Coordinating storage with those activities can support a stronger investment case than relying on day-ahead arbitrage alone.
The memorandum sets an indicative target, but no final investment decision or project schedule beyond the initial three-year period is specified.