Montenegro’s Ministry of Energy has annulled its first auction for solar power market premiums after all submitted bids failed to meet legal and procedural requirements. The tender, launched last year, was cancelled because applications contained outdated documentation, were not aligned with spatial planning rules or did not satisfy grid connection eligibility criteria.
The authorities now plan to relaunch the process under a revised tender framework that will include both solar and wind projects. The new round will be part of a three-year incentive program for 2026–2028, adopted as a core element of Montenegro’s EU Reform Agenda. The scheme follows the recent Law on the Use of Energy from Renewable Sources, which introduced a market-premium based support system, replacing fixed feed-in mechanisms and aligning the country with the EU’s Reform and Growth Instrument.
Montenegro entered this new phase in July 2025 by launching its first solar auction based on competitive bidding. The initial call covered a quota of 250 MW for solar plants above 400 kW, with a strike price capped at €65/MWh and a 12-year market premium contract. Under this model, the state compensates producers when market prices fall below the bid price, while excess revenues are returned to the budget when prices exceed it. Although 11 companies purchased tender documents, only four bids were submitted, none of which qualified.
The upcoming program will set technology-specific quotas and an auction calendar for the next three years. A new solar auction for 250 MW is scheduled for the first quarter of 2026, followed by a 200 MW wind auction in the third quarter. In total, up to 450 MW of new renewable capacity will be eligible for market premiums between 2026 and 2028. All tenders will be location-neutral and managed by the Ministry of Energy in line with Montenegro’s National Energy and Climate Plan adopted in December 2025.
The Ministry has not yet estimated the fiscal impact of the scheme, noting that both subsidy payments and potential state revenues will depend on future auction prices and market conditions. As supported projects are expected to become operational only from 2028, the first auction round has not been included in medium-term budget planning. Officials argue, however, that the model could ultimately benefit public finances and consumers, citing France, where a similar system reportedly returned more than €8 billion to the state budget during the 2022 energy crisis.