The Parliament of Montenegro passed the Law on the Use of Energy from Renewable Sources, which was published in the Official Gazette of Montenegro on August 23rd, 2024. The Law will enter into force on the eighth day from the day of its publication in the Official Gazette of Montenegro.
This Law fully transposes Directive 2018/2001/EU of the European Parliament and Council dated December 11th, 2018, on the promotion of the use of energy from renewable sources - CELEKS 32018L2001.
The Law defines renewable energy sources as renewable non-fossil energy sources, such as wind energy, solar energy (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tidal energy, wave energy and other marine energy, hydropower, biomass, landfill gas, gas from wastewater treatment plants and biogas.
The Law regulates in more detail the matter of planning the renewable sources energy share and administrative procedures; incentive systems for generating electricity from renewable sources; market premium systems; feed-in tariff system for small plants and demonstration projects; financing the incentive system; buyers-producers; Energy communities; use of renewable energy in traffic; use of renewable energy in the heating and cooling sector; criteria of sustainability and savings of greenhouse gas emissions for biofuels, bioliquids and fuels from biomass; measures and activities for the realization of public interest, and similar.
As a novelty, the Law recognizes Energy communities, which regulates the grouping of natural and legal persons into communities of renewable energy sources, which is based on open and voluntary participation with the aim of promoting and using renewable energy.
Also, the Law specifically regulates the use of renewable energy in traffic, which significantly affects the obligations of fuel suppliers, achieving the renewable energy share in traffic, encouraging the clean energy transition, use of renewable energy sources in the transport sector and the establishment of the necessary infrastructure.
An interesting aspect is the regulation of the market premium as a type of incentive that is calculated during the accounting period and is paid as the difference between the reference market price and the realized price based on the contract on the market premium, concluded between the authorized contracting party and the temporary privileged producer - if in the accounting period the reference market price price higher than the realized price, privileged electricity producers are obliged to pay the difference between these prices to the authorized contracting party in accordance with the contract on market premium. Then it is a negative market premium. Law stipulates the possibility for privileged producers to exercise the right to compensation for electricity that they could have produced and made available to the system operator, but were prevented from delivering such energy due to delivery restrictions by the competent system operator. In addition, the obligation to adjust the realized price at the auction with the inflation rate is determined, as well as the amount of incentives in the market premium system is determined based on the reference market price on the day-ahead electricity market.
The law also defines the right to a fid-in tariff, which can only be acquired in connection with small plants or demonstration projects. The right to.. Namely, the authorized contracting party is obliged to sell the electricity purchased from the privileged producer to the supplier and to the self-supplier customer during the incentive period.
The main effects of the adopted Law are the creation of better conditions for investing in the construction of facilities for generating electricity from renewable sources and highly efficient cogeneration. The Law represents an improvement in the legal framework for the use of electricity generated from renewable sources in the electricity sector, as well as in the heating, cooling, and transport sectors. Furthermore, the Law establishes additional improvements to the regulatory framework for the production of electricity by buyers-producers.
It is estimated that the adoption of this Law will have a positive effect on the buyers due to the development of the electricity market and the improvement of the regulatory framework for electricity production by customers - producers, as well as on investors in terms of improving the possibility of investing in renewable energy sources.
By Aleksa Jankovic and Dajana Drljevic, Associates, JPM & Partners
