ENERGY SECTOR IN MONTENEGRO

1.Overview of the Current Situation

Montenegrin Investment Promotion Agency (MIPA)

Electric Power Sector

• EPCG – Electric Power Company of Montenegro;• State Monopoly (67% state ownership - 33% private);• New Energy Law adopted in 2003;• Regulatory Agency established in January 2004;• EPCG functionally unbundled – January 2005;• Legal unbundling is taking place in the next period;• Treaty establishing the Energy Community in SEE

(SEE REM) is signed;• Energy Sector Development Strategy is developed.

Oil and Gas Sector• Jugopetrol Kotor – the largest petrol firm in

Montenegro (54% owned by Hellenic Petroleum and 46% owned by Investment funds and citizens). Still, around 40% of the petrol-station are outside of Jugopetrol;

• Import of oil derivates and gas is free (12 importers);• Regulatory Energy Agency established in 2004 is in

charge for licenses, but not for final price of the oil derivates and gas;

• Annual import of oil derivates is 350,000 t;• There is no infrastructure for gas distribution and

therefore consumption of gas is minimal one;• There is no Petroleum Law;

2.Hydro and Thermo Potential

Montenegrin Investment Promotion Agency (MIPA)

Hydro Power Potential

• Total hydropower potential 10 TWh;

• Utilized at the moment - 17%;

• Two large hydropower plants, installed capacity 649 MW, average annual generation 1.7 TWh;

• 7 small hydropower plants, installed capacity 9,025 MW, average annual generation 21 GWh.

Hydro Power Plants

• Decisions on privatization is made;

• Privatization Strategy of the EPCG will be completed by October 1st 2005;

• Focus will be on providing framework for privatization of Distribution system and Production;

• EPCG is functionally unbundled;

Small Hydro Power Plants

• EPCG Board of Directors made decision for 5 Small hydro plants to be privatized;

• Necessary documents are being prepared, tender procedure is about to be announced;

• Total installed capacity 2,71 MW; annual generation 5,5 GWh.

Opportunities for New SHPP

• There are 70 project designs for SHPPs (capacity – up to 10 MW), total installed capacity 231,005 MW and average annual generation 642,933 GWh.

• There are project designs for 16 SHPPs with installed capacity up to 1 MW, 17 SHPPs with installed capacity from 1 to 2 MW, and 37 SHPPs with installed capacity over 2 MW.

Large HPP projects

• HPP “KOSTANICA” (544 MW 1332,1 GWh/y)

• HPPs on Moraca River(Natural flow: 238,4 MW; 693,7 GWh/y, Water diversion: 357,6 MW; 1010 GWh/y

• HPP “KOMARNICA” (168 MW; 231,3 GWh/y)

• HPP “LJUTICA” (224 MW; 553,6 GWh/y)

Thermo Power Potential• One thermal power plant, installed

capacity 210 MW, average annual generation 1.07 TWh;

• Gray lignite coal potential:

In Pljevlja – estimated reserves 205 million t out of which proved exploitations reserves are about 110 million t

In Berane (gray coal) – estimated reserves 38 million t out of which exploitations reserves are 17 million t

• Estimated reserves of gas in Block III are about 200 billion m3.

Other two block are not estimated yet;

• Solar energy;

• Energy by Wind. Pilot project – Wind Plant at Vilusi (near NIksic). 500 kW. 1,25-1,80 GWh/god.

New Potentials

Production, Consumption and Balance of Electricity

-2000

-1000

0

1000

2000

3000

4000

5000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Production Consumption Balance

3.Oil and Gas Potential

Montenegrin Investment Promotion Agency (MIPA)

Is there a gas in Montenegro?

• Off shore of Montenegro is divided in three blocks for exploration;

• The State gave concession rights to Jugopetrol which for exploration are expiring latest by 2007;

• Jugopetrol signed two joint ventures contracts with foreign partners;

• There are possibilities for new international tenders for gas exploration and exploitation (including gas on the land);

Large HPP projects

• HPP “KOSTANICA” (544 MW 1332,1 GWh/y)

• HPPs on Moraca River(Natural flow: 238,4 MW; 693,7 GWh/y, Water diversion: 357,6 MW; 1010 GWh/y

• HPP “KOMARNICA” (168 MW; 231,3 GWh/y)

• HPP “LJUTICA” (224 MW; 553,6 GWh/y)

Overview of the Investment Possibilities

New SourcesWind & Solar

Gas Exploitation

Thermo Plant

Small Hydro PlantsLarge Hydro

Plants

InvestmentOpportunities