Policy area

Energy

Sustainable development goals and international commitments

The global premise and the key driver of socio-economic development of modern societies is clean, accessible and renewable energy. In that sense, key international efforts are invested towards meeting energy needs of countries through transition from non-renewable and polluting energy sources towards those that meet the growing energy demand in a sustainable, resource-efficient and climate-neutral way. To that effect, the UN 2030 Agenda for Sustainable Development, set as sustainable development goals (SDG) 7 – Affordable and clean energy, thus stressing universal access to affordable, reliable and modern energy sources and improvement in energy efficiency, through international cooperation, enhanced energy infrastructure and new technology.

Montenegro as a UN member state is committed to pursuing the 2030 Agenda, and thus in 2016 it adopted the National Sustainable Development Strategy by 2030 (NSDS). The NSDS is an overarching development strategy document setting energy as one of the priority development sectors that should follow the principles of sustainability, resource-efficiency, clean production and consumption, and which should generate employment and green economy. The NSDS set the following goals elaborated in specific measures for the energy sector to be achieved by 2030:

ENABLE EFFICIENT NATURAL RESOURCE MANAGEMENT

  • Enable resource-efficient use of wood resources

 

ADDRESS THE ISSUES OF UNSUSTAINABLE CAPACITATING OF SPACE GENERATED BY UNREALISTIC DEMAND IN TERMS OF QUANTITY AND LOW QUALITY OF BUILT-UP AREAS

  • Enable construction of new buildings exclusively in accordance with sustainable architecture and construction standards, and improve the existing construction stock

 

REDUCE GHG EMISSIONS BY 30% BY 2030 COMPARED TO 1990

  • Build capacities, improve education and raise public awareness about climate change and measures to mitigate them
  • Increase the share of renewable energy sources and promote rational use of energy

 

IMPROVE RESOURCE EFFICIENCY IN KEY SECTORS OF THE ECONOMY

  • Improve resource efficiency through introduction of market-oriented measures, i.e. through introduction of economic instruments into key economic sectors

 

Apart from the commitments stemming from the UN membership, Montenegro also ratified the Energy Charter Treaty thus undertaking to pursue sustainable energy development, improved energy security and maximising efficiency of energy generation, conversion, transport, distribution and use to increase security of supply in a socially acceptable, economically viable and environmentally justified manner.

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Obligations in the EU accession process

An overview of obligations from negotiation chapters.

The European Union (EU) is one of the leading international entities in the development of clean, renewable and sustainable energy sources as the basis for economic growth and prosperity with high investments in improving energy efficiency and developing clean technologies.

Seeing this through the lenses of pre-accession talks between Montenegro and the EU, it becomes clear that honouring the commitments from negotiation chapters will bring Montenegro closer to meeting SDGs by 2030. In this context particularly worth mentioning is Chapter 15 – Energy which contains the rules and policies which, among other things, deal with the internal energy market, security of supply, renewable energy, energy efficiency and nuclear energy. The chapter has several closing benchmarks Montenegro is to meet: Montenegro to complete legislative alignment with the acquis on oil reserves, establish an administrative structure for the management of oil reserves and start establishing reserves in accordance with the Action Plan; Montenegro to comply with the internal energy market acquis, including the separation of all energy entities in accordance with any of the models defined in the acquis; Montenegro to comply with the energy efficiency acquis. Other relevant chapters in reference to SDGs is the Chapter 21 – Trans-European networks which deals with the issues of trans-European energy networks, i.e. energy connectivity among member states, which increases energy availability and security of supply, the Chapter 27 – Environment and Climate Change which is connected with the Chapter 15 in aspect of climate change, i.e. main objectives of energy policy to reduce CO2 emission, increase share of energy from renewable sources and to increase energy efficiency, as well as Chapter 25 – Science and research concerning new technologies in the energy sector. In the end, it is important to emphasise on connection with the Chapter 8 – Competition policy following that the EU energy policy is based on the competition principle.

EU Strategic framework

The European long-term strategic vision for a prosperous, modern, competitive and climate-neutral economy aims at setting the direction for EU climate and energy policies, and defining the framework for EU long-term contribution to attaining the Paris Agreement goals concerning the global temperature in line with the UN sustainable development goals, which by extension has a bearing on a wider set of EU policies. The strong focus is on energy efficiency as the key element for achieving climate neutrality, and greater share of renewables in energy production.

The European Green Deal is the EU policy which aspires to transform European continent into a modern, prosperous, resource-efficient, competitive and fair society. In terms of energy, the emphasis is on decarbonisation of the energy sector with strong focus on renewable and clean energy sources, smart energy infrastructure in line with the vision of EU climate neutrality, reducing the risk of energy poverty and improving energy efficiency.

The EU Strategy for the Adriatic-Ionian Region is the EU policy adopted with the aim of promoting economic and social prosperity and growth in the Adriatic-Ionian region which implies energy connectivity of the countries in the region to ensure energy market competitiveness, security of supply and energy sustainability as the key goals pursued by the EU energy policy.

EU Climate Target Plan 2030 (defined values in terms of reducing GHG emissions, energy efficiency, renewable and clean energy, health promotion, environmental protection from pollution, green economy)

European Union Strategy for the Danube Region is the EU macro-regional strategy which within the Priority – Sustainable Energy defines targets which are to be accomplished on sustainable energy development plan. .

EU Bio-economy Strategy (conducive to establishing circular economy, resource conservation, renewables, energy efficiency)

2030 Climate and Energy Framework sets the long-term vision for the EU energy sector development to ensure availability of clean energy for all consumers, ensure security of supply, mitigate the adverse impact of the energy sector on air pollution and generate jobs. The specific policy goals to be achieved by 2030 include: increasing the share of renewable energy in gross final energy consumption by 32%, increasing energy efficiency across EU by 32.5% and reducing GHG emissions by 40%.

Climate and Energy Package 2020 is a set of legislative acts adopted in pursuit of the following EU-level goals: reduced GHG emissions by 20% compared to 1990, 20% more renewable energy and 20% increase in energy efficiency. The achievement of these goals should be conducive to greater energy security in the EU and the establishment of the Energy Union.

Energy Union – A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy (the aim is to build a resilient energy union with ambitious climate policy that gives the EU consumers secure, sustainable, competitive and affordable energy. The energy union builds five closely related and mutually reinforcing dimensions designed so as to increase energy security, sustainability and competitiveness: security, solidarity and trust; a fully integrated internal energy market; energy efficiency which reduces demand; decarbonizing the economy; research, innovation and competitiveness.)

Energy Efficiency Directive (2012/27/EU) (sets the obligations for the EU member states in order to increase energy efficiency to 32.5% by 2030 with the possibility of revising the target in 2023. The EU member states are obliged to transpose this directive by 25 June 2020)

EU Emissions Trading System (EU ETS) (combating climate change, reducing GHG emissions, establishing a market for trading emissions, support to the industry and energy sectors in reducing GHG emissions through financing mechanisms)

European Regional Policy is the main investment policy that offers direct support to the pursuit of EU policy goals in various sectors, including the energy sector.

Strategic Energy Technology Plan (integrate renewable technologies into energy systems, energy efficiency in industry, renewable fuels and bioenergy, carbon capture and storage, new materials and technologies for buildings, new technologies and services for consumers)

Innovation Fund (innovative solutions for renewable energy, energy storage)

EU Strategy for Energy System Integration (establishment of circular energy systems characterized by energy efficiency, greater energy supply to consumers, use of renewable and low-carbon fuels, greater flexibility of energy systems from the consumer’s point of view, reduction of negative impacts on climate and environment)

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International indicators

Share of renewable energy in gross final energy consumption

Monitors percentage-wise share of renewable energy compared to final energy consumption

Energy productivity

Calculated by dividing gross domestic product (GDP) with gross available energy for the given calendar year. It tracks productivity in energy consumption and gives an insight into the separation of energy consumption from GDP growth

GHG emissions intensity of energy consumption

Monitors the ratio of GHG emissions and the total internal energy consumption

Montenegro's strategic framework

Current strategy papers
Expired strategy papers

Energy in Montenegro’s strategic framework

As regards policies governing the energy sector, it is noteworthy that safety of supply, competitive power market and sustainable energy development are identified as key priorities. In this regard, the Energy Development Strategy 2014-2030 set the following targets to be achieved by 2030 (according to the simplified EUROSTAT forms): primary energy production – 43,888; gross domestic energy consumption – 65,927; available for final consumption – 46,382; final consumption – 46,151. Observed by the share of energy sources and fuels in consumption, the Strategy sets the following target values for 2030:

  • Solid mass and waste – 8.9%
  • Hydro – 11%
  • Coal – 21,243%
  • Petroleum products – 21.7%

According to the same document, the projected financial costs (investments) in the energy sector until 2030 are as follows:

  • Remote heating – 31,920 mil. Euro (0.8%)
  • Coal sector – 121,610 mil. Euro (2.9%)
  • Electricity transmission – 245.225 mil. Euro (5.9%)
  • Oil and gas sector – 559,894 mil. Euro (13.4%)
  • Renewable energy sources – 728,527 mil. Euro (17.4%)
  • Energy efficiency – 788,110 mil. Euro (18.8%)
  • Electricity production (large HPs and TPs) – 1,160,710 mil. Euro (27.7%)

Seen in the context of accession negotiations with the EU, Montenegro adopted the law on efficient use of energy that transposed main provisions of the EU energy efficiency Acquis, which is strongly conducive to SDG 7.3. Going forward, however, in order to meet the obligations from the EU accession process, Montenegro needs to join a functional market and join with neighboring power markets and fully align domestic legislation with the EU Directive on Safety of Offshore Operations.

Further alignment of domestic legislation with the EU energy efficiency acquis is also needed, as well as the establishment of the Energy Efficiency Fund and the functioning of the system for calculating energy efficiency indicators and savings.

According to the 2020 UN Sustainable Development Report, Montenegro ranks 72out of 193 countries with the SDG index of 70.19/100. Concerning SDG7 and affordable clean energy, e trend of moderate progress is present with key challenges regarding accessibility of clean fuels. It is worth mentioning here that by 2020 Montenegro already met its national target of 33% of gross final energy consumption from renewables, and a set of legislative acts and strategic documents were adopted strongly conducive to achieving SDG 7.a and 7.b.

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