Montenegro’s Ministry of Energy has officially annulled its first solar power auction due to all submitted bids failing to comply with legal and procedural standards. The auction, initiated last year, was deemed invalid as the applications were found to contain outdated documentation, did not adhere to spatial planning regulations, and failed to meet grid connection eligibility criteria.
In response to this setback, authorities are preparing to relaunch the tender process under a revised framework that will encompass both solar and wind energy projects. This new initiative is part of a three-year incentive program scheduled for 2026–2028, which aligns with Montenegro’s EU Reform Agenda. The framework follows the enactment of the Law on the Use of Energy from Renewable Sources, introducing a market-premium support system that replaces fixed feed-in tariffs, thereby aligning Montenegro with the EU’s Reform and Growth Instrument.
The initial auction phase commenced in July 2025, focusing on competitive bidding for a quota of 250 MW designated for solar plants exceeding 400 kW. The bidding process set a strike price limit of €65/MWh and offered a 12-year market premium contract. Under this arrangement, producers receive compensation when market prices dip below their bid price, while any excess revenue is returned to the state budget when prices rise above it. Despite 11 companies purchasing tender documents, only four bids were submitted, none qualifying for further consideration.
The forthcoming program aims to establish technology-specific quotas and an auction calendar over the next three years. A new solar auction for an additional 250 MW is slated for the first quarter of 2026, followed by a wind auction of 200 MW in the third quarter. Collectively, up to 450 MW of new renewable capacity will be eligible for market premiums during the 2026-2028 period. All tenders will be location-neutral and overseen by the Ministry of Energy in accordance with Montenegro’s National Energy and Climate Plan adopted in December 2025.
Currently, the Ministry has not provided an estimate regarding the fiscal implications of this new scheme. The financial impact will largely depend on future auction outcomes and prevailing market conditions. Notably, since supported projects are anticipated to become operational only by 2028, the initial auction round has not been factored into medium-term budget planning. Nevertheless, officials maintain that this model could potentially enhance public finances and benefit consumers in the long run, referencing France’s experience where a similar approach reportedly generated over €8 billion for the state budget during the energy crisis of 2022.
