Montenegro drafts first renewables law, sets rules for auctions

Montenegro has issued the draft Law on the Use of Energy from Renewable Sources, which introduces a number of novelties, including auctions for premiums and feed-in tariffs.

The Ministry of Mining and Energy has organized a series of three round tables in the country’s capital Podgorica on the draft law on the use of renewables.

Earlier, the European Bank for Reconstruction and Development (EBRD), which advises the government, said Montenegro could launch the first auction for renewables by 2025.

With the draft, the ministry is fulfilling its obligations towards the Energy Community to transpose and implement the European Union’s Renewable Energy Directive (2018/2001). The deadline was December 31, 2022.

By 2030, Montenegro is obligated to reach a 50% share of renewable energy in total final consumption

The directive establishes a common framework for the promotion of renewable energy and sets a target for its share in total final consumption in 2030 for all the contracting parties of the Energy Community.

Montenegro’s target is 50%, the ministry noted and added that the draft law regulates the activities for reaching the goal.

The document also defines rules on financial support for electricity from renewable sources, on self-consumption (prosumers), the use of energy from renewables in heating and cooling and the transport sector, and on guarantees of origin.

It also sets the criteria for biofuels, bioliquids, and biomass-derived fuels for sustainability and the reduction of greenhouse gas emissions.

The price ceiling at auctions would be determined by the regulatory agency

According to the ministry, the draft is undergoing an urgent adoption procedure so that the country can obtain access EU funds and favorable loans from the World Bank.

The Government of Montenegro is tasked with the adoption of the three-year incentive system plan for market premiums and feed-in tariffs. It would serve as a basis to set annual quotas for one or more auctions, types of technology, and the capacity that would be offered.

Premiums and feed-in tariffs are envisaged to be awarded for the total or a part of a facility, while the price ceiling is set by the Energy and Water Regulatory Agency of Montenegro (REGAGEN), the draft reads.