Montenegro’s state power utility EPCG has signed a memorandum of understanding with Japan’s PowerX setting an indicative target of about 500 MWh of battery energy storage systems over an initial three-year period. The commercial case is to coordinate batteries with hydro resources, growing solar generation and cross-border trading, rather than depend on standalone arbitrage. The targeted volume is material for Montenegro’s relatively small power system.
Montenegro’s 2026 energy balance envisaged planned solar generation of roughly 198 GWh. Planning also expected solar capacity to reach around 215 MW in 2026 as prosumer and utility projects expand. That growing, weather-dependent output will sit alongside flexible hydro resources owned by EPCG.
Reservoir hydro can shift large volumes of energy over longer periods, but its operation is constrained by hydrology and water management. Batteries could add a short-duration layer, responding within seconds to absorb brief solar surpluses and support intraday trading without changing water releases. Coordinated dispatch could preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable.
A battery could charge when Montenegro has surplus power or when imported electricity is cheap, then discharge into domestic demand or during regional scarcity. Montenegro trades across a power system connected to Serbia, Bosnia and Herzegovina, Albania and the Italy link, allowing storage to be coordinated with imports and exports.
This approach could help EPCG reduce imbalances in a portfolio combining weather-dependent solar generation and hydro inflows. The commercial model should assess storage as part of the whole portfolio, rather than as an isolated profit centre. The appropriate investment measure is the incremental value storage adds across EPCG’s hydro, solar, imports, exports and balancing position, not the battery’s standalone returns.
System-level value could support a stronger investment case for storage than pure day-ahead arbitrage. The memorandum’s target remains indicative and covers the initial three-year period.