Montenegro is on the brink of transforming its electricity market, moving from a historically isolated framework towards integration with regional energy hubs. The anticipated completion of the Electricity Integration Package by February 2026 will enable Montenegro to engage in Single Day-Ahead Coupling (SDAC) and Single Intraday Coupling (SIDC), contingent upon formal verification processes.
The current state of BELEN, Montenegro’s electricity market, has been characterized by low liquidity and substantial price discrepancies. As of 24 February, BELEN recorded a base price of 40.00 EUR/MWh, significantly undercutting Hungary’s prices by nearly 75 EUR/MWh. Such stark price differentials are not conducive to a coupled market environment, drawing interest from speculative investors who anticipate future alignment.
The introduction of market coupling is projected to enhance liquidity within BELEN by broadening its participant base and facilitating implicit capacity allocation. This increased depth in the order book is expected to mitigate execution risks and promote more competitive bidding practices. Analysis indicates that while average prices may rise as risk premiums decrease, overall volatility could see a reduction.
Moreover, the implementation of intraday coupling is poised to be equally impactful. It will enable continuous cross-border trading, allowing participants to address forecast inaccuracies in real-time, thereby minimizing exposure to imbalances and fostering more proactive day-ahead trading strategies.
However, experts warn that this coupling may also introduce new volatility into Montenegro’s market dynamics. Increased sensitivity to price fluctuations from neighboring markets, particularly Italy and Hungary, is anticipated during periods of regional stress. Consequently, this transition should be viewed as a repricing mechanism rather than a pathway to stabilization.
