Montenegro’s state-owned power utility Elektroprivreda Crne Gore (EPCG) will install a 47 MW solar power plant on the roofs and on land at the former steelworks Željezara Nikšić, according to the business plan of its newly established subsidiary EPCG – Željezara Solar.
EPCG bought the company in Nikšić for EUR 20 million from Tosçelik, based in Turkey.
The installation of solar panels, as reported by Vijesti, is planned for March, on the roofs and land in the Nikšić steel plant. A 17 MW unit is planed to be built on 226,000 square meters of roofs, and an additional 30 MW on the ground.
The future solar power plant’s production cost is estimated at EUR 24 per MWh
EPCG plans to take a EUR 33 million loan for the investment with a repayment period of ten years. The solar power plant, according to the plan, is expected to produce 61,000 MWh per year at a cost of EUR 24 per MWh. The electricity would be sold to EPCG at a price that is 50% lower than the one at the Hungarian power exchange HUPX, where it currently goes for around EUR 200 per MWh.
The facility is expected to produce and sell electricity worth EUR 4.7 million by the end of the year, while the projection for next year is EUR 8.7 million. In 2025 EPCG anticipates electricity prices to decrease, resulting in EUR 5.9 million in income, which it sees stabilizing at EUR 4.5 million in the following years.
The income from the sale of electricity would be significantly higher than the cost of repaying the loan for its construction
The plan envisages that the annual repayment of loans in the first ten years will be significantly lower compared to the income from electricity sales. Over the period of its 16 years of operation, electricity worth EUR 75 million would be produced, and the loan repayment would cost EUR 38.5 million.
EPCG said it used a conservative approach in projections, which would mean production can only be higher and the price of solar panels can only be lower.
Željezara has a substation with a free capacity of almost 80 MW
EPCG would benefit from the solar power plant because it would use the increased electricity production to reduce imports during the summer months, according to the plan.
Marko Perunović, the president of the Board of Directors of EPCG-Željezara Nikšić, said the biggest value of the steel plant is its energy potential. Namely, the substation there has a free capacity of almost 80 MW.
Today in Montenegro, it is more difficult to provide infrastructure for the connection of solar power plants than to install them, Perunović claimed.