EPCG, Montenegro’s power utility and owner of flexible hydro resources, signed a memorandum of understanding with Japan’s PowerX targeting about 500 MWh of battery energy storage over an initial three-year period. The strongest case for storage is to coordinate it with hydro, growing solar resources and cross-border trading rather than operate it as a standalone arbitrage asset. The targeted volume is material for Montenegro’s relatively small power system.
Montenegro’s 2026 energy balance envisaged roughly 198 GWh of solar generation, with solar capacity expected to reach around 215 MW in 2026 as prosumer and utility projects expand. Batteries can respond within seconds, absorb short-term solar surpluses and support intraday trading. This flexibility can be used alongside weather-dependent solar generation and hydro inflows.
Reservoir hydro can shift large volumes of energy over longer periods, but its operation is constrained by hydrology and water management. Batteries can manage short-term adjustments without changing water releases. Coordinating dispatch can preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable, while using batteries for faster responses and short-term surpluses.
Regional connections link Montenegro’s power system with Serbia, Bosnia and Herzegovina, Albania and the Italy link. These cross-border connections create opportunities to charge a battery when Montenegro has surplus power or imported power is cheap, then discharge into domestic demand or regional scarcity. A battery could also help EPCG reduce imbalances in a portfolio that combines weather-dependent solar output with hydro inflows.
The commercial model should optimise EPCG’s whole portfolio, rather than assess the battery energy storage system as an isolated profit centre. Its value should be measured by the incremental contribution to hydro, solar, imports, exports and EPCG’s balancing position. Coordinating storage with the wider portfolio can support a stronger investment case than pure day-ahead arbitrage, according to the stated commercial rationale.