The Pljevlja thermal power plant in Montenegro, a crucial energy source, faces increasing scrutiny as it grapples with environmental compliance and the European Union’s directives for closure. The 225MW lignite facility accounted for approximately 40% of the country’s electricity generation in 2024. When offline, Elektroprivreda Crne Gore (EPCG) must source power from an unpredictable regional market, while the plant is responsible for significant air pollution and carbon emissions during its operation.
EPCG’s ecological upgrade initiative aims to mitigate these environmental concerns through measures such as flue-gas desulphurization and improved controls for nitrogen oxides and particulates. The estimated costs for these upgrades vary, with public discussions suggesting figures ranging from €58 million for core environmental improvements to about €86 million when including additional work and taxes. These figures represent different scopes of the project rather than competing estimates.
Preliminary tests conducted on the desulphurization system indicated a reduction in sulphur dioxide emissions from 4,544 milligrams per cubic meter in March 2025 to around 61 milligrams per cubic meter by February 2026. While this represents a significant local health benefit if maintained, it does not address the inherent carbon emissions associated with each megawatt-hour generated or the long-term impacts of mining operations.
The European Commission’s report in 2025 emphasized that while EPCG’s ecological reconstruction efforts are underway, they do not resolve the fundamental issue of needing a definitive closure pathway and a just transition plan for the coal-dependent region. The report highlights a dual regulatory framework: one governing industrial emissions and another addressing climate policy and electricity market integration.
Montenegro’s National Energy and Climate Plan adopted in December 2025 provides a structured approach to reforming the power sector. However, decisions regarding plant closure remain complex. Closing the facility without sufficient replacement energy sources could lead to increased imports and heightened security risks. Conversely, prolonged operation may expose EPCG to escalating carbon costs and compromise Montenegro’s EU accession credibility.
The recent reconstruction outage in 2025 illustrated the financial implications of inadequate planning; EPCG reported contracting 788 GWh of electricity imports at a cost of €81.7 million to offset generation shortfalls. This highlights the necessity for a robust replacement energy portfolio prior to ceasing operations at the coal plant.
As EPCG transitions away from coal, it will need reliable energy sources beyond merely installed renewable capacity. Projects such as the Gvozd wind farm, alongside additional solar and wind initiatives, upgraded hydropower facilities, and battery storage solutions are essential for long-term generation stability. While interconnections with neighboring countries like Serbia, Bosnia and Herzegovina, and Italy could enhance flexibility, reliance on imports introduces risks related to pricing and availability.
The local economy tied to Pljevlja also requires attention; the coal plant and associated mining operations support jobs, suppliers, and municipal revenue in an area that is economically lagging behind coastal regions. While district heating improvements can create lasting public assets, they do not provide employment opportunities for displaced mining workers. Transitioning to renewable energy sources necessitates funded projects focused on remediation, grid enhancements, renewable construction, forestry initiatives, industrial services, and worker retraining.
EU grants and development institutions are encouraged to take on greater risks than typical commercial banks by financing necessary infrastructure improvements that yield social benefits exceeding immediate financial returns. Meanwhile, EPCG should focus on commercially viable alternatives for energy generation while the government identifies budgetary needs for non-commercial obligations instead of embedding them within utility accounts.
A strategic operational plan should establish clear annual limits on emissions and operational costs while outlining specific milestones for developing replacement capacity. This plan would also need to prepare EPCG for potential challenges such as low hydrology conditions or high import prices alongside carbon pricing mechanisms. A definitive closure date should be set based on established security conditions rather than political considerations.
Transparency regarding reconstruction efforts is vital; EPCG must consistently report on performance metrics and total costs associated with upgrades. A compliance-focused approach that only meets standards during testing periods lacks substantial value. Continuous independent monitoring of emissions data alongside assessments of coal quality and maintenance expenditures will determine whether extending operations is justified compared to potential liabilities.
While EPCG’s investment in reducing local pollution aligns with operational needs during this transition period, misinterpreting retrofit investments as justification for indefinite coal use would be counterproductive. The European Union insists on establishing a clear endpoint for operations since current investments do not inherently provide one. Montenegro now faces the challenge of leveraging this cleaner phase to develop replacement power solutions and secure funding for Pljevlja’s future before reaching that endpoint.
