Montenegro Cancels Inaugural 250 MW Solar Auction, Re-tender Expected in Q1 2026

Inaugural Solar Auction Canceled

Montenegro's first competitive renewable energy auction, designed to secure 250 MW of solar power capacity, has been canceled. The Ministry of Energy announced the decision in December, disqualifying all four bids that were submitted. The auction, launched in July 2025 with support from the European Bank for Reconstruction and Development (EBRD), aimed to award market premiums for new solar projects.

Reasons for Bid Disqualification

The disqualification of all bids stemmed from various failures to meet the prescribed conditions. According to the Ministry of Energy, issues included the submission of documents that were considered too old, as well as non-compliance with requirements related to spatial planning documentation and grid connections. The Ministry also acknowledged that there were 'shortcomings regarding the auction qualification terms' themselves, indicating a need for revisions in future tenders. While 11 entities initially purchased tender documentation, only four ultimately submitted bids by the November 10, 2025 deadline.

Path Forward: New Auctions and Ambitious Targets

Despite the setback, Montenegro is moving swiftly to re-launch the initiative. A new auction for the same 250 MW of solar capacity is planned for the first quarter of 2026. This will be followed by a separate auction for 200 MW of wind power in the third quarter of 2026. These auctions are integral to Montenegro's broader strategy to transition to a greener energy mix. The country aims to achieve 50% of its final energy consumption from renewable sources by 2030 and generate 70% of its electricity from green sources.

The auctions offer market premiums in the form of 12-year Contracts for Difference (CfDs), with a maximum allowed price of €65 per MWh. This mechanism guarantees a stable price for producers while requiring them to return the difference if market prices exceed the agreed rate, making the model financially sustainable. The first projects resulting from these auctions are anticipated to become operational between 2028 and 2030.

Commitment to EU Reform Agenda

The competitive bidding process for renewable energy is a key component of Montenegro's commitments under the EU Reform Agenda 2024-2027 and its obligations within the Energy Community framework. The nation's new legal framework for green energy transition, adopted in August 2024, includes provisions for an auction system, guarantees of origin, and streamlined permitting procedures, all designed to attract investment and accelerate the integration of renewables. This strategic shift underscores Montenegro's dedication to decarbonization and its ambition to become a regional leader in renewable energy.