Montenegro’s state-owned electricity provider, EPCG, has taken a significant step in enhancing its wind energy capacity by entering into a new agreement with German turbine manufacturer Nordex. This partnership focuses on the development of a second phase at the Gvozd wind site, located near Nikšić, marking a shift towards a multi-phase renewable energy platform as Montenegro seeks to diversify its energy generation away from coal.
The initial phase of the Gvozd wind farm, which is currently under construction, has an installed capacity of approximately 55 MW. The addition of the second phase is projected to increase the site’s total capacity to between 75–80 MW, contingent on the final configuration of turbines and grid integration requirements.
This new agreement builds upon an existing collaboration, wherein Nordex is responsible for supplying turbines, managing installation, and providing long-term maintenance under a 25-year service contract. The first phase utilizes high-capacity turbines in the 6–7 MW class, aligning with a regional trend in Southeast Europe towards larger turbines that maximize output on limited sites.
From a financial perspective, the Gvozd project is structured as a phased investment initiative. The estimated cost for the initial phase stands at around €80–85 million, while the second phase is expected to require an additional €20–30 million, culminating in total investments exceeding €100 million. Financing for these developments has been secured through multilateral institutions, enabling EPCG to enhance its capacity while maintaining financial flexibility amid concurrent investments in solar and hydroelectric projects.
This phased approach mitigates execution risks and allows for shared infrastructure, such as grid connections and internal access roads, across different project phases. It also reflects the practicalities of permitting and financing cycles in Montenegro, where incremental expansions often prove more feasible than undertaking large-scale projects all at once.
Upon completion, the Gvozd complex is anticipated to produce between 150–180 GWh annually, significantly contributing to Montenegro’s overall wind energy output. This initiative aims to decrease reliance on coal-fired power generation, particularly from the Pljevlja thermal plant, which remains a critical component of the country’s energy supply but faces increasing regulatory scrutiny and environmental challenges.
The agreement with Nordex further solidifies its presence in Montenegro and strengthens its operations across Southeast Europe. As turbine suppliers increasingly collaborate with state utilities and regional developers, long-term service agreements have become essential for ensuring project viability, particularly in smaller markets where operational stability is crucial for financing.
The expansion of the Gvozd project occurs during a period of transformation within regional power markets. The growing share of renewable energy sources in Southeast Europe is beginning to influence price dynamics, with wind generation increasingly impacting marginal pricing during peak production times. Additional capacity from projects like Gvozd is expected to enhance this trend, exerting downward pressure on prices during favorable wind conditions while contributing to market volatility throughout intraday trading periods.
Moreover, Montenegro’s integration into the Balkan interconnected grid adds a regional dimension to this project. Excess energy generated during high wind periods can be exported to neighboring countries such as Serbia, Bosnia and Herzegovina, and Italy via undersea connections, thereby enhancing Montenegro’s role as a flexible energy supplier within Southeast Europe.
The decision to advance with the second phase of Gvozd reflects EPCG’s broader strategic shift towards diversifying its portfolio away from traditional hydro-thermal generation towards renewable energy sources. This transition prioritizes both decarbonization goals and market competitiveness as renewable technologies become increasingly cost-effective compared to fossil fuel-based options.
As construction progresses and funding for the second phase is secured, the Gvozd platform is poised to emerge as one of Montenegro’s key energy assets, influencing domestic energy security and enhancing the country’s position in an evolving interconnected power market driven by weather patterns.
