Montenegro’s power utility EPCG has signed a memorandum of understanding with Japan’s PowerX targeting about 500 MWh of battery energy storage over an initial three-year period. The investment case is strongest when storage is coordinated with EPCG’s hydro resources, growing solar output and cross-border trading, rather than used as a standalone arbitrage asset.
The targeted volume is significant for Montenegro’s relatively small power system. The country’s 2026 energy balance envisaged roughly 198 GWh of solar generation, while solar capacity was expected to reach around 215 MW as prosumer and utility projects expand.
Reservoir hydro and batteries provide different types of flexibility. Hydro can shift large volumes of energy over longer periods, although reservoir operations are constrained by hydrology and water management. Batteries can respond within seconds, absorb short-term solar surpluses and support intraday trading without altering water releases.
Coordination could preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable, while helping EPCG reduce imbalances across a portfolio that combines weather-dependent solar generation and hydro inflows. Montenegro’s power system is connected to Serbia, Bosnia and Herzegovina, Albania and the Italy link. These connections could enable a battery to charge during domestic surpluses or when imported power is cheap, then discharge to meet domestic demand or regional scarcity.
The commercial model should assess the battery’s incremental contribution to EPCG’s hydro, solar, import, export and balancing portfolio, rather than treating the battery storage system as an isolated profit centre. The system-level value of coordination could support a stronger investment case than day-ahead arbitrage alone. The memorandum targets the storage volume over an initial three-year period.