Montenegro’s state-owned electric utility, EPCG, has signed a new agreement with German turbine manufacturer Nordex to advance the development of the second phase of the Gvozd wind project, located near Nikšić. This agreement marks a shift from executing individual projects towards a multi-phase renewable energy strategy as Montenegro aims to diversify its energy generation away from coal.
The initial Gvozd wind farm, which is currently under construction, has an installed capacity of approximately 55 MW and is recognized as EPCG’s most significant state-led renewable initiative to date. The upcoming Gvozd 2 phase is projected to increase the total capacity of the site to between 75 MW and 80 MW, contingent on the final configuration of turbines and grid integration specifics.
This latest agreement builds upon an existing collaboration in which Nordex is responsible for providing turbines, managing installation, and offering long-term maintenance under a 25-year service agreement. The first phase utilizes high-capacity turbines in the 6–7 MW class, reflecting a regional trend in Southeast Europe towards larger turbine installations aimed at maximizing energy output in limited spaces.
Financially, the Gvozd project follows a phased investment approach. The first phase is estimated to cost around €80–85 million, while the second phase is expected to require an additional €20–30 million, bringing the total investment above €100 million. This financing structure has been supported by multilateral institutions, enabling EPCG to enhance its capacity while maintaining financial flexibility amidst ongoing investments in solar and hydroelectric projects.
This staged development minimizes execution risks and allows for shared infrastructure—such as grid connections and access roads—to be utilized across both phases. It also aligns with the realities of permitting and financing cycles in Montenegro, where incremental growth is often more feasible than large-scale projects.
Upon completion, the Gvozd complex is anticipated to generate between 150 GWh and 180 GWh annually, representing a substantial portion of Montenegro’s current wind energy production. This initiative will aid in decreasing dependence on coal-fired power generation, particularly from the Pljevlja thermal plant, which remains crucial for the country’s base load supply but faces increasing regulatory scrutiny.
The agreement enhances Nordex’s presence in Montenegro and strengthens its position across Southeast Europe, where turbine manufacturers are increasingly partnering with state utilities and local developers to secure ongoing service revenues. The incorporation of extended maintenance contracts has become vital for ensuring project viability, especially in smaller markets where operational stability is essential for securing financing.
The expansion of the Gvozd project coincides with significant transformations within regional power markets. The growing share of renewables in Southeast Europe is starting to influence pricing structures, with wind energy increasingly affecting marginal prices during high-output periods. Additional capacity from projects like Gvozd is expected to intensify this trend, exerting downward pressure on prices during windy conditions while contributing to market volatility throughout the day.
Moreover, Montenegro’s integration into the Balkan power grid provides a broader regional context for this project. Surplus energy generated during optimal wind conditions can be exported to neighboring countries such as Serbia, Bosnia and Herzegovina, and Italy via an undersea interconnector, thereby enhancing Montenegro’s role as a flexible energy supplier within Southeast Europe.
The decision to advance with the second phase of Gvozd also indicates a strategic shift within EPCG. The utility is evolving from primarily focusing on hydro-thermal operations to becoming a diversified renewable energy developer, with wind and solar at the forefront of its future plans. This transition is driven by not only decarbonization goals but also by changing market dynamics that favor renewable energy over fossil fuels.
As construction continues and funding for the second phase progresses, the Gvozd platform is poised to become one of Montenegro’s key energy assets, influencing both domestic energy security and the country’s role in an increasingly interconnected Southeast European power landscape.
