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 plan is to coordinate storage with EPCG’s flexible hydro resources, growing solar generation and regional electricity trading. The companies are not assessing batteries solely as standalone arbitrage assets.
Montenegro’s 2026 energy balance envisaged about 198 GWh of solar generation, while plans anticipated solar capacity reaching around 215 MW as prosumer and utility projects expand. Adding weather-dependent solar generation to a portfolio shaped by hydro inflows increases the need to manage output changes and maintain balance. Battery storage could help EPCG reduce imbalances across the portfolio.
Reservoir hydropower can shift large volumes of energy over longer periods, but its operation is constrained by hydrology and water management. Batteries can respond within seconds, absorb short-term solar surpluses and support intraday trading without altering water releases. Coordinating the two technologies could leave reservoir capacity available for periods when hydro’s longer-duration flexibility is more valuable, while batteries address shorter-term changes in supply and demand.
Regional trading and portfolio value
Montenegro’s power system is connected to Serbia, Bosnia and Herzegovina, Albania and the Italy link. Batteries could charge when the country has surplus electricity or imported power is cheap, then discharge to serve domestic demand or during regional scarcity. Storage could therefore help manage imports and exports as well as local generation in a system connected to neighbouring markets.
The commercial model is intended to optimise EPCG’s overall portfolio rather than operate the battery energy storage system as a standalone profit centre. Its value should be assessed by its additional contribution to hydro, solar, imports, exports and the company’s balancing position. System-level benefits from coordinating storage with these activities could strengthen the investment case compared with relying on day-ahead arbitrage alone. The memorandum sets an indicative target, but does not specify a final investment decision or a project schedule beyond the initial three-year period.