Energy Development in Montenegro

1
Energy Development in Montenegro
Government of Montenegro Ministry of Economic
Development
6 November 2008, Sofia
2
ENERGY SECTOR IN MONTENEGRO

• Energy sector in Montenegro is composed of
• Electric Power Company of Montenegro, Holding
  company - Nikic (EPCG)
• Coal Mine, Holding company - Pljevlja
• Brown Coal Mine, Holding company, Ivangrad -
  Berane
• Jugopetrol, Holding company - Kotor
• Montenegro Bonus - Cetinje
• Energy sector recognized as significant driving
  force of
• national economy.
• Development of energy sector is defined by
• Energy Policy of Montenegro and
• Energy Development Strategy of Montenegro by 2025
  

3
GOAL AND STRATEGIC COMMITTMENTS

• GOAL Ensure sustainable, secure and competitive
  energy supply by increasing energy efficiency and
  increasing the use of renewable sources
• STRATEGIC COMMITTMENTS
• - common market for electricity and natural
  gas
• - efficient energy consumption and generation
  
• - use of renewable energy sources
• Montenegro, as ecological state and SAA
  signatory, supports the intention of the EU to
  achieve the objectives set in January 2007 by
  2020
• Reduce greenhouse gases emission by 20
• Increase energy efficiency and reduce energy
  consumption by 20
• Raise share of renewable energy sources to 20
• Raise share of biofuels to at least 10

4
MAJOR STRATEGIC COMMITMENTS

• Reasonable valorization of available potentials
  through the construction of new facilities and
  increase of energy efficiency, towards better
  supply security
• Achieving a balance between energy development
  and environmental protection
• Regulatory, legislative and operational
  integration in the process of approaching the EU
  in the fields of energy and environment,
  including integration in SEE and EU energy market
• Implementation of obligations under theTreaty
  establishing the Energy Community, as the first
  legally binding document of Montenegro towards
  the EU
• Continuation of energy reform, while respecting
  sustainable development and market operation
  principles
• Ensuring social protection in the process of
  reform changes in energy sector
• Support to investors for CDM mechanism projects

5
REFORM OF THE ENERGY SECTOR

• Historic Record of Key Achievements
• Energy Law (adopted in June 2003)
• Energy Regulatory Agency (established in January
  2004)
• Energy Policy (adopted in February 2005)
• Energy Efficiency Strategy (adopted in October
  2005)
• Strategy for Small Hydro Power Plants
  Development in Montenegro (adopted in April
  2006)
• Energy Community Treaty (ratified in October
  2006)
• Kyoto Protocol (ratified in March 2007)
• Assessment of Renewable Energy Resources (wind,
  solar, biomass) (adopted in April 2007)
• Public Invitation for Awarding Concession for
  Exploration of 43 (forty three) Water Streams and
  Construction of the Small Hydro Power Plants
  (published in November 2007)
• National Energy Development Strategy until 2025
  (adopted in December 2007) KEY DOCUMENT,
  IDENTIFYING INVESTMENT OPPORTUNITIES IN THE
  ENERGY SECTOR OF MONTENEGRO
• Spatial Plan of Montenegro until 2020 (adopted by
  the Parliament of Montenegro in March 2008)
• Energy Development Strategy and Spatial
  Plan of Montenegro are harmonized.
• Action Plan (2008 2012) for implementation of
  Energy Development Strategy of Montenegro by 2025
  (adopted in October 2008)
• Legal unbundling of Electric Power Company of
  Montenegro (EPCG) (is underway)
• Development of electricity market (market opening
  - 1 January 2009)
• Project of capital increase of EPCG (is underway)

6
Investment-related Legislation

• Investment-related laws in Montenegro are
• Law on waters (adopted in May 2007 - Official
  Gazette of the RoM, number 27/07)
• Law on environment (adopted in August 2008 -
  Official Gazette of the RoM, number 48/08)
• Law on physical planning and construction
  (adopted in August 2008 - Official Gazette of the
  RoM, number 51/08)
• Law on concessions (was prepared in procedure of
  adoption)
• Law on prospects, exploration and exploitation of
  oil and gas (preparation is underway)
• Law on gas (preparation is underway)
• Law on renewable energy resources (preparation is
  underway)
• Law on energy efficiency (preparation is
  underway)
• Next two laws are being applied from 1st January
  2008
• Law on Strategic Environmental Impact Assessment
  (Official Gazette of the RoM, number 80/05)
• Law on Environmental Impact Assessment (Official
  Gazette of the RoM, number 80/05)
• Secondary acts and regulations for SHPPs were
  prepared

7
Energy potentials in Montenegro

• Potential for energy savings (energy efficiency)
• Potential for energy savings is very high in
  Montenegro (20-30).
• Renewable energy potentials (hydro, wind,
  biomass, solid waste, solar potential)
• Hydro potential is one of the most valuable
  natural resources of Montenegro.
• Coal resources (In addition to hydro potential,
  coal is the most important energy resource in
  Montenegro)
• Pljevlja area - total exploitation reserves
  amount 184.5 million tons
• Berane area - geological reserves amount around
  158 million tons and total presumed exploitation
  reserves have been estimates at only approx 18.5
  million tons.
• Oil and gas potential (submarine zones in
  Montenegro)
• Potential oil reserves amount approx 7
  billion barrels, while potential natural
  gas reserves amount 425 billion m3.

8
Action Plan (2008 2012)

• Action Plan Core Contents
• CC 1 Increase energy efficiency and use of
  renewable energy sources in
• consumption
• CC 2 Increase efficiency of the existing
  generation and transmission facilities
• CC 3 Design a plan to mitigate climate change
  effects
• CC 4 Creation of the institutional framework
  and the public involvement in the
• development of a competitive and
  market oriented energy sector
• CC 5 Development and exploitation of renewable
  energy sources
• CC 6 Increase cleaner energy production from
  fossil fuels
• CC 7 Create the basis for long-term energy
  industry development in Montenegro

9
Programmes and Projects in Action Plan (I)

• 1.CC Increase energy efficiency and use of
  renewable
• energy sources in consumption in
  Montenegro
• 1.1 Energy Efficiency Programme
• 1.2 Project on energy management (Energy
  Management System) in
• the public sector
• 1.3 Project on energy saving in the public
  sector
• 1.4 Project on promoting and performing energy
  audits

10
Programmes and Projects in Action Plan (II)

• 2. CC Increase efficiency of the existing
  generation and transmission facilities
• 2.1 Programme for developing electric power
  networks
• 2.2 Project for revitalisation of small HPPs
• 2.3 Project for revitalisation of HPP Piva
• 2.4 Project for revitalisation of HPP Perucica
  phase II
• 2.5 Project for revitalisation of TPP Pljevlja
• 2.6 Project for recovery and expansion of
  electric power
• transmission network
• 2.7 Project for recovery and expansion of
  electric power
• distribution network

11
Programmes and Projects in Action Plan (III)

• 3. CC Designing a plan to mitigate climate
  change effects
• 3.1 Project for energy inclusion in mitigation of
  climate change effects in Montenegro
• 4. CC Creation of the institutional framework
  and the public involvement in the development of
  a competitive and market oriented energy sector
• 4.1 Programme for the energy sector
  restructuring - market opening and social policy
• 4.2 Programme for the energy sector public
  relations
• 4.3 Programme on education and training in
  energy and ecology
• 4.4 Project for EPCG JSC restructuring

12
Programmes and Projects in Action Plan (IV)

• 5. CC Development and exploitation of renewable
  energy sources
• 5.1 Programme for development of renewable
  energy sources
• (hydro potential excluded)
• 5.2 Programme of hydro potential use in
  Montenegro
• 5.3 Project of building small HPPs
• 5.4 Project of using wind energy for electricity
  generation
• 5.5 Project of using biomass for heat and
  electricity cogeneration
• 5.6 Project of using municipal waste for
  electricity generation
• 5.7 Project of building HPP Komarnica
• 5.8 Project of building HPP on the Moraca river

13
Programmes and Projects in Action Plan (V)

• 6. CC Increase cleaner energy production from
  fossil fuels
• 6.1 Project of TPP Pljevlja II with heating
  system for town of Pljevlja
• 6.2 Project of LNG terminal close to town of Bar
• 6.3 Project of gas system for town of Podgorica
  with the distribution gas network

14
Programmes and Projects in Action Plan (VI)

• 7. CC Create the basis for long-term energy
  industry development in Montenegro
• 7.1 Programme of oil and gas exploration in
  Montenegro's mainland
• 7.2 Programme of international agreement on the
  use of hydro potential
• 7.3 Project of oil and gas exploration in
  Montenegro's seabed block 1 i 2
• 7.4 Project of oil and gas exploration in
  Montenegro's seabed block 3
• 7.5 Project of coal exploration in Pljevlja area
  
• 7.6 Project of coal exploration in Berane area
• 7.7 Project of the Ionic-Adriatic gas pipeline
• 8. CC Creation of mechanisms for effective
  monitoring and follow-up of Action Plan
  implementation
• 8.1 Programme of Action Plan monitoring and
  follow-up

15
ENERGY INFRASTRUCTURE DEVELOPMENT ACTUAL
PROJECTS IN MONTENEGRO (I)

• Revitalisation of of the existing generation
  facilities
• Project for revitalisation of HPP Piva
• Project for revitalisation of HPP Perucica
  phase II
• Project for revitalisation of TPP Pljevlja
• Total generation will be increased by additional
  400 GWh per year.
• Development of electric power transmission
  network
• Project of construction of 400 kV transmission
  power line Podgorica Tirana
• Project of undersea connection between the
  electric power systems of Italy and Montenegro
  (Cooperation EPCG Terna)
• Projects for recovery and expansion of electric
  power distribution network

16
ENERGY INFRASTRUCTURE DEVELOPMENT ACTUAL
PROJECTS IN MONTENEGRO (II)

• Project of building HPP on the Moraca river
• Four hydro power plants Andrijevo, Raslovici,
  Milunovici and Zlatica
• Total installed capacity 238 MW and annual
  generation 693 GWh
• Invitation for expression of interest was
  published on October 27th, 2008
• Project of building HPP Komarnica
• Installed capacity 168 MW and average annual
  generation 231,8 GWh
• Project of building small HPPs
• Government awarded concessions for 8 water flows
  for exploration and construction of small HPPs
• Contracts were signed on September 26th , 2008
• Preparation of a new tender for construction of
  small HPP is underway
• Project of using wind energy for electricity
  generation
• Detailed measurements on potential locations is
  underway
• Preparation of legislation and tender
  documentation is underway
• Project of using biomass for heat and electricity
  cogeneration
• Preparation of the feasibility studies for
  biomass exploitation in Berane and Nikic is
  underway

17
ENERGY INFRASTRUCTURE DEVELOPMENT ACTUAL
PROJECTS IN MONTENEGRO (III)

• Project of TPP Pljevlja II with heating system
  for town of Pljevlja
• Preparation of Preliminary Design and Feasibility
  Study for construction of TPP "Pljevlja II is
  underway
• Project of coal exploration in Pljevlja area
• Preparation of tender for coal exploitation in
  Maoce area is underway
• (December 2008)
• Project of coal exploration in Berane area
• Geological exploration of reserves, review of
  available documentation, analyses are underway
• Project of oil and gas exploration in
  Montenegro's seabed Block 3
• Model of Contract and Tender for Block 3 in the
  preparation phase (March 2009)
• Project of the Ionic-Adriatic gas pipeline
• Preliminary preparation of feasibility study and
  conceptual project, selection of potential routes

18
CORE NEXT STEPS IN MONTENEGRO

• Measure for increasing security of energy supply
• Investment activities and realization of priority
  energy projects
• Continuation of the energy sector reform
• Improvement of regional cooperation
• Integration in SEE and EU energy market
• Generally, implementation of national
• Energy Policy, Strategy and Action Plan

19
THANK YOU FOR YOUR ATTENTION!