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 strongest case for batteries is to coordinate them with EPCG’s hydro resources, expanding solar generation and cross-border trading, rather than operate them as standalone arbitrage assets. The targeted volume is material 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.
Battery storage and reservoir hydro provide different forms of flexibility. Hydro can shift large volumes of energy over longer periods, but reservoir operations are constrained by hydrology and water management. Batteries can respond within seconds, absorb short-term solar surpluses and support intraday trading without changing water releases. Coordinating battery dispatch with hydro could preserve reservoir value for periods when hydro’s longer-duration flexibility is more valuable. That approach would use batteries for short-term flexibility while retaining water for longer-duration needs.
A battery could also help EPCG reduce imbalances across a portfolio combining 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 create opportunities to charge when domestic power is in surplus or imported power is cheap, then discharge into domestic demand or regional scarcity.
Commercial assessment should focus on the battery’s incremental contribution to EPCG’s hydro, solar, imports, exports and balancing position, rather than treat the battery energy storage system as an isolated profit centre. The system-level value of coordinating storage with the wider portfolio can support a stronger investment case than relying on day-ahead arbitrage alone.
