Montenegro’s state power utility EPCG and Japan’s PowerX have signed a memorandum of understanding targeting about 500 MWh of battery energy storage system capacity over an initial three-year period. The storage opportunity centres on coordinating batteries with EPCG’s flexible hydro resources, expanding solar generation and cross-border trading, rather than relying on standalone battery arbitrage.
The target is material for Montenegro’s relatively small power system. The country’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. Battery storage could help EPCG reduce imbalances in a portfolio combining weather-dependent solar generation and hydro inflows.
Reservoir hydro 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 solar surpluses and support intraday trading without changing water releases. Coordinated dispatch can preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable, while batteries address shorter-term needs.
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 into domestic demand or regional scarcity. Storage can therefore be assessed in relation to the country’s imports and exports as well as its domestic generation and demand.
The commercial model should optimise EPCG’s whole 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 EPCG’s balancing position. System-level value from coordinating storage with those activities can support a stronger investment case than pure day-ahead arbitrage.
That approach places battery storage within a hydro-solar-trading portfolio. The memorandum’s target is indicative and covers an initial three-year period.