Montenegro’s EPCG and Japan’s PowerX have signed a memorandum of understanding setting an indicative target of about 500 MWh of battery energy storage systems over an initial three-year period. The opportunity is to coordinate storage with EPCG’s hydro resources, expanding solar generation and cross-border trading, rather than rely on batteries earning returns through standalone arbitrage. The target is material for Montenegro’s relatively small power system.
Battery storage alongside hydro and solar growth
Montenegro’s 2026 energy balance envisaged roughly 198 GWh of planned solar generation. Planning also expected solar capacity to reach around 215 MW as prosumer and utility projects expand. This growth adds weather-dependent output to a power portfolio that includes flexible hydro resources owned by EPCG.
Reservoir hydro can shift large volumes of energy over longer periods, although its operation is constrained by hydrology and water management. Batteries would provide a short-duration layer, responding within seconds, absorbing brief solar surpluses and supporting intraday trading without changing water releases. Coordinating battery dispatching with hydro could preserve reservoir value for periods when longer-duration flexibility is more useful.
Storage within cross-border trading and portfolio operations
A battery could charge when Montenegro has surplus power or imported electricity is cheap, then discharge to meet domestic demand or during regional scarcity. Montenegro trades across a power system connected to Serbia, Bosnia and Herzegovina, Albania and the Italy link, creating opportunities to coordinate storage alongside imports and exports. This flexibility could help EPCG reduce imbalances in a portfolio combining solar generation and hydro inflows.
The commercial model should assess storage across the whole portfolio, rather than treat it as an isolated profit centre. The relevant measure is the incremental value to EPCG across hydro, solar, imports, exports and EPCG’s balancing position. System-level benefits could support a stronger investment case than day-ahead arbitrage alone.