A significant solar energy initiative in Montenegro has received full environmental and construction clearance, allowing the Tupan solar power plant near Nikšić to proceed into the execution phase. This development is notable as it represents one of the most advanced private renewable energy projects currently under development in the country.
The Tupan project, spearheaded by Podgorica-based S2P Tupan, boasts an installed capacity of 90 MW, making it one of the largest single-site solar installations within Montenegro’s expanding photovoltaic sector. The solar facility will occupy approximately 156 hectares, strategically located in the Nikšić plateau, which is recognized for its favorable solar irradiation conditions.
Technical documentation indicates that the project will feature over 129,000 photovoltaic modules, utilizing about 56% of its total site area. This configuration aligns with modern layouts utilized in Southern Europe, employing either fixed-tilt or single-axis tracker systems.
The Tupan project is indicative of a broader shift in Montenegro’s energy policy, transitioning from pilot projects to substantial infrastructure investments in utility-scale solar power. With annual electricity generation in Montenegro averaging around 3 TWh, the addition of a 90 MW solar facility is expected to diversify the energy mix, which has traditionally relied heavily on hydropower and electricity imports during dry seasons.
Expected benefits of the project include an increased share of renewable energy in the national grid, reduced vulnerability to hydrological fluctuations, and enhanced export capabilities during peak solar generation periods.
S2P Tupan, established in 2023 as a special-purpose vehicle for this project, is backed by private investors and Swiss-based S2P Electric. This ownership model reflects a common trend in the Western Balkans, combining foreign technical expertise with local execution capabilities while adhering to EU environmental standards.
The recent issuance of a “green permit” confirms that the Tupan project has successfully completed several critical evaluations, including an Environmental Impact Assessment (EIA), land-use compliance checks, and technical conditions for grid integration. This milestone signifies a significant reduction in project risk and enables progression into phases such as EPC structuring, financing negotiations, and initial procurement activities.
Though specific capital expenditure (CAPEX) figures have not been disclosed, similar utility-scale projects in Southeast Europe suggest an investment range between €0.55 million and €0.75 million per MW. Consequently, the total estimated investment for the Tupan project could be between €50 million and €70 million, influenced by factors like grid connection requirements and configuration choices.
Current market benchmarks indicate power purchase agreements (PPAs) within a range of €60 to €90 per MWh. The financial projections for the project suggest an equity internal rate of return (IRR) between 9% and 13%, with potential for higher returns linked to export pricing or congestion-driven opportunities.
The Nikšić region is emerging as a renewable energy hub due to existing transmission infrastructure and proximity to hydroelectric resources. However, challenges remain concerning grid absorption capacity and curtailment risks during peak production hours. Addressing these issues will necessitate innovations such as hybridization with battery energy storage systems (BESS) and flexible dispatch strategies.
The Tupan solar power plant exemplifies several transformative trends within Montenegro’s energy landscape: a shift towards private-sector-led renewable energy deployment, the establishment of bankable solar projects ready for financing, a growing focus on export-oriented generation models, and advancements toward integrating hybrid solutions and storage capabilities into the energy system.
