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:

  • PROVIDE INCLUSIVE AND QUALITY EDUCATION AND PROMOTE LIFELONG LEARNING OPPORTUNITIES FOR ALL
    • Promote educational and scientific component in higher education
  • OVERCOME THE MANAGERIAL DEFICIT PROBLEM AND STRENGTHEN SOCIALLY RESPONSIBLE BUSINESS
    • Increase innovative and entrepreneurial potential of the economy
  • ENABLE EFFICIENT NATURAL RESOURCE MANAGEMENT
    • Enable resource-efficient use of water 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
    • Improve the quality of life in cities
  • REDUCE GHG EMISSIONS BY 30% BY 2030 COMPARED TO 1990
    • Introduce low-carbon technologies in installations in line with best practices
    • 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
    • Improve resource efficiency by introducing regulatory instruments
    • Foster research and development in the area of resource efficiency and human resource development
    • Improve information availability related to natural resources value, resource use, resource efficiency and integrate them gradually into the systems for economy performance calculation
    • Promote resource efficiency and valuation of limited resources
  • SUPPORT GREENING OF THE ECONOMY THROUGH THE DEVELOPMENT AND IMPLEMENTATION OF OPERATIONAL INSTRUMENTS OF SUSTAINABLE CONSUMPTION AND PRODUCTION
    • Develop and promote practice and solutions of sustainable consumption and production that support efficient use of natural resources and minimize environmental loads
    • Develop the legal framework to support sustainable consumption and production
    • Raise awareness and improve knowledge about sustainable production and consumption
  • INCREASE THE LEVEL OF MONTENEGRIN ECONOMY COMPETITIVENESS FOR SUSTAINABLE DEVELOPMENT AND GREEN JOBS
    • Boost competitiveness of Montenegrin companies through measures to foster resource efficiency and investments
  • STRENGTHEN THE ENVIRONMENTAL MANAGEMENT SYSTEM THROUGH APPLICATION OF ENVIRONMENTAL PROTECTION INSTRUMENTS
    • Improve the application of systemic environmental management instruments

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.

EU acquis chapters

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 SDG 7 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, as well as Chapter 25 – Science and research concerning new technologies in the energy sector.

EU Strategic framework

Europe 2020 strategy is the EU development policy which, in terms of energy, is focused on increasing the share of renewables in final energy consumption by 20%, increasing the energy efficiency in the EU by 20%, and reducing GHG emission by 20% by 2020.

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.

The European Union Strategy for the Danube Region is the EU macro-regional strategy which in the section on Region Connectivity gives emphasis to sustainable energy.

EU Bioeconomy 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%.

2020 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; decarbonising 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)

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

Energy policy is addressed by a number of strategy documents, both overarching and sector-specific ones. Thus, the Medium-term Government Work Programme 2018-2020 (MGWP) singles out energy as one of the priority sectors for Montenegro’s economic development. Accordingly, within priority 4: Montenegro – A Country of Successful Infrastructure Projects, the focus is on diversifying energy sources, with increased shares of renewables in gross final energy consumption to 33% by 2020, and on increasing security of supply through improvements to transmission and distribution systems; concerning energy efficiency the plan is to improve energy performance of public buildings, set up central records and monitoring over energy consumption in the public sector and support citizens to access energy efficient technologies  to effectuate savings in final energy consumption of 1% (3% in the public sector) by 2020.

From the point of view of Development Directions for Montenegro 2018-2021, the main focus of sustainable growth in the energy sector is on: reducing commercial power losses, meeting energy demand while minimising generation and distribution cost and environmental impact; increasing the use of renewable energy by building additional capacity; reducing final consumption through energy efficiency and consumption rationalisation measures.

Economic Reforms Programme 2020-2022, as the single most important document in Montenegro’s economic dialogue with the European Union and the key strategy document of the country for medium-term macroeconomic and fiscal programming, also targets the energy sector as most relevant for economic development, identifying the following key challenges:

  • inadequate ownership, managerial and organisational structure of electric power entities, having an adverse impact on their performance;
  • investments in electric power infrastructure;
  • insufficient integration in the regional power market due both to insufficient interconnection infrastructure with the neighbouring power systems and the deficient legislative and regulatory frameworks;
  • lack of natural gas market and gas

Given the challenges, the key measures concern the improvement of the ownership, managerial and organisational structures of electric power entities predominantly state-owned and improved legislative, regulatory and institutional framework for integration into the regional power market.

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.

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 neighbouring power markets, adopt the rules for auctions for providing support to renewable energy producers in line with the guidelines on state aid for environmental protection and energy 2014-2020, 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 2019 UN Sustainable Development Report, Montenegro ranks 87 out of 162 countries with the SDG index of 67.3/100. Concerning SDG7 and affordable clean energy, it stands at 85.0 (out of 100) with the trend of moderate progress and 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.

Other policy areas in the same sector