Montenegro’s state-owned power utility, EPCG, is progressing with the construction of the Gvozd 2 wind farm, which has a capacity of 21 MW. The project is currently nearing completion on the second of three turbine foundations, as EPCG aims to enhance its renewable energy generation portfolio.
The Gvozd 2 project, developed in collaboration with turbine manufacturer Nordex, is estimated to cost nearly €26 million and is projected to produce approximately 63 GWh of electricity annually upon completion.
This expansion will augment the existing Gvozd wind complex located on the Krnovo plateau. Once finished, the total capacity of the installation is expected to reach 75.6 MW, generating over 200 GWh per year, which EPCG claims will be sufficient to supply around 35,000 households.
The recent construction update marks a significant milestone as it transitions the project from planning and contracting stages into active execution. This development aligns with Montenegro’s goal of boosting investment in domestic energy generation.
EPCG has indicated that no revised commissioning date was provided in this update. The Gvozd 2 initiative is part of a broader strategy by EPCG to decrease Montenegro’s reliance on hydropower and aging thermal generation while enhancing its capacity for electricity exports.
Investment in wind and solar energy has accelerated throughout Montenegro; however, the transition from permitted projects to actual construction remains a critical challenge for the renewable sector.
EPCG’s investment strategy encompasses wind, solar, hydro modernization, and grid-supporting initiatives. The company is also collaborating with international developers to increase the number of projects that can advance to construction.
While an additional 63 GWh of annual wind generation may seem modest relative to Montenegro’s overall power system, it is strategically important as it contributes output without incurring fuel costs and diversifies energy production away from hydropower.
Hydroelectric power continues to play a vital role in Montenegro’s energy landscape but is susceptible to fluctuations in rainfall and reservoir levels. During periods of low hydrological output, there may be an increased need for energy imports or additional thermal generation.
Although wind energy production presents its own variability, a more diversified energy generation mix can help mitigate dependence on any single resource. The Krnovo plateau is already recognized as a viable area for wind energy generation, thereby reducing some risks associated with developing new locations.
Expanding an existing renewable energy cluster facilitates better utilization of established infrastructure and operational expertise. However, Montenegro’s power system faces challenges related to integration as additional renewable capacity necessitates improvements in transmission and distribution networks, enhanced forecasting capabilities, and increased flexibility through storage solutions and regional electricity trading.
The ongoing investments by Montenegro’s transmission operator CGES and distribution operator CEDIS are essential for accommodating new capacity. Additionally, battery storage technology is emerging as a significant topic within national energy discussions.
The economic viability of new renewable facilities will increasingly hinge on prevailing market conditions. Electricity markets in Southeast Europe have experienced more frequent occurrences of low or negative pricing during periods of high renewable output. Consequently, renewable projects must manage price exposure effectively rather than relying solely on annual generation forecasts.
The anticipated value of Gvozd 2 will depend not only on its expected annual output of 63 GWh but also on factors such as timing of electricity generation, regional pricing dynamics, and EPCG’s overall portfolio strategy. A diversified utility can manage some risks more adeptly than standalone renewable developers by integrating wind with hydroelectric and thermal resources along with customer demand and cross-border trading opportunities.
The expansion at Gvozd forms part of Montenegro’s broader ambition to enhance its position as a regional electricity exporter. The country has established interconnections with neighboring systems and maintains a subsea cable linking it to Italy, thus expanding access for additional generation potential beyond local demand constraints.
Export economics will be influenced by regional price differentials, transmission congestion, and available capacity within the grid. This project could also assist EPCG in lowering its carbon footprint as European climate policies increasingly target reductions in coal-based generation.
Montenegro’s Pljevlja thermal power plant remains crucial for ensuring supply security; however, its long-term operational viability is limited by emissions regulations and EU decarbonization strategies. By adding more renewable capacity, EPCG gains flexibility as Montenegro approaches EU membership and integrates further into European electricity markets and carbon regulations.
The €26 million investment in Gvozd 2 represents just one aspect of a larger capital requirement facing EPCG. The utility is pursuing various solar and wind projects alongside refurbishing hydro facilities while managing working capital challenges stemming from significant electricity receivables.
As such, careful sequencing of projects and disciplined financing will be vital moving forward. While renewable investments can strengthen EPCG’s long-term generation capabilities, they must be executed within manageable financial and grid constraints.
The current construction progress indicates that Gvozd 2 is approaching operational status within Montenegro’s extensive renewable energy pipeline—a crucial step towards translating planned projects into functional capacity.
