Tuesday, May 28, 2024
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Montenegro advances towards integration and growth in European energy markets

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Montenegro’s Ministry of Energy has recently initiated the process of connecting its day-ahead electricity market to the unified European energy market, in line with the country’s commitments to the Energy Community. This move, according to the Montenegrin Electricity Exchange, promises to unlock new business prospects for market participants while bolstering efficiency, competitiveness, and service standards. The integration of markets is a prerequisite outlined in Chapter 15 – Energy of Montenegro’s negotiation process.

“The primary objective of this integration is to harmonize our market prices with those of Europe, thus extending the reach of Montenegro’s market into the broader European arena. This synchronization enables seamless matching of supply and demand, facilitating optimal trading conditions and ensuring competitive market prices,” explained Dragana Radulović, spokesperson for the Montenegrin Electricity Exchange.

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Projections indicate that Montenegro’s market could achieve integration with the European market by the first quarter of 2026, though this timeline is contingent on the complexity of adapting algorithms and ensuring continuity with existing EU markets.

“Transitioning from hourly intervals to fifteen-minute bidding and aligning with Europe’s focus on integrating the intraday market represent additional factors shaping our timeline. Moreover, the integration process is pivotal for effectively incorporating renewable energy sources into our energy system,” added Radulović.

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The introduction of the day-ahead electricity market last April marked a significant milestone, enhancing transparency and efficiency within Montenegro’s domestic market. This market mechanism, based on best practices from EPEX SPOT and BSP Southpool, facilitates daily electricity trading through auction-based price formation, fostering a more liquid and transparent marketplace.

Radulović disclosed that Montenegro’s day-ahead market turnover for 340 delivery days amounted to 35.05 million EUR, demonstrating substantial trade activity. Currently, the market boasts 23 registered participants, with ongoing registration processes for two more entities, comprising a mix of domestic and international stakeholders.

Established in 2017 by EPCG, CGES, and COTEE, the Montenegrin Electricity Exchange serves as a cornerstone for market operations and development.

In addition, Radulović underscored the significance of the submarine energy cable, emphasizing its role in stimulating regional electricity market growth within Southeast Europe.

“The connection with Italy extends our market reach, allowing Montenegrin offers to access a broader market, thereby influencing pricing dynamics and facilitating greater market integration across Europe,” Radulović concluded.

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