Montenegro’s EPCG and Japan’s PowerX have signed a memorandum of understanding with an indicative target of about 500 MWh of battery energy storage system capacity over an initial three-year period. The companies plan to coordinate storage with EPCG’s flexible hydro resources, expanding solar output and regional electricity trading, rather than assess batteries as standalone arbitrage assets. The target is material for Montenegro’s relatively small power system.
Montenegro’s 2026 energy balance envisaged roughly 198 GWh of solar generation, while planning expected solar capacity to reach around 215 MW as prosumer and utility projects expand. Adding weather-dependent solar to a portfolio shaped by hydro inflows creates a need to manage changes in output and balance. Battery systems could help EPCG reduce imbalances across that portfolio.
Storage alongside hydro and regional trade
Reservoir hydropower can shift large volumes of energy over longer periods, but is subject to hydrological and water-management constraints. Batteries can respond within seconds, absorb short-term solar surpluses and support intraday trading without changing water releases. Coordination between the technologies could preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable, while batteries address shorter-term shifts in supply and demand.
Montenegro’s power system is connected to Serbia, Bosnia and Herzegovina, Albania and the Italy link. A battery could charge when the country has surplus power or imported electricity is cheap, then discharge to meet domestic demand or respond to regional scarcity. Storage could therefore play a role in managing imports and exports as well as local generation within a system linked to neighbouring markets.
The commercial model should optimise EPCG’s entire portfolio rather than treat the battery energy storage system as an isolated profit centre. Its value should be measured by its incremental contribution to hydro, solar, imports, exports and the company’s balancing position. System-level benefits from coordinating storage with those activities can support a stronger investment case than reliance on day-ahead arbitrage alone. The memorandum sets an indicative target; it does not specify a final investment decision or a project schedule beyond the initial three-year period.