The Ministerial Council of the Energy Community (EC) could adopt a conclusion at a meeting in Vienna today that Montenegro has violated the international treaty establishing the EC by which it undertook to harmonize the operation of the Thermal Power Plant (TE) Pljevlja with EU directives, which could cause serious consequences .
That's what an economic analyst told "Vijesti". Dejan Mijović stating that the two highest bodies of the European Union (the European Commission and the EU Council) accepted the opinion (conclusion) of the EC Secretariat.
"If the majority of those present at the meeting vote that Montenegro has violated the contract (which is expected because this is the position of the EU), that decision will have full legal effect. The future operation of the TE will become illegal, which can have serious repercussions for Montenegro, its international reputation and credit rating," said Mijović to "Vijesta".
He warned that Elektroprivreda (EPCG), which owns TE, could face major financial risks.
"It could, for example, be sued for unfair competition because it did not invest the necessary (demanding) funds in the fundamental modernization of the thermal power plant, as electricity producers from other EC and EU member countries did," said Mijović.
At the end of 2020, TE Pljevlja spent 20 working hours, which were allowed for the period from 2016 to 2018, i.e. in the so-called opt-out mechanism, by the decision of the EC Ministerial Council from 2023. This mechanism allows EU members to exempt certain coal-fired power plants from the application regime of the EU Directive on large combustion plants, which entered into force on January 1, 2018, and prescribes the reduction of harmful gas emissions. After the hours in the opt-out mechanism expire, the plant can only remain in operation if it meets the strict standards of the Industrial Emissions Directive.
On April 20, 2021, the Secretariat of the European Union opened a case against Montenegro because it did not harmonize the operation of the thermal power plants with European regulations before the expiration of the permitted working hours.
"The Secretariat has preliminarily concluded that Pljevlja Thermal Power Plant, the only large thermal power plant operating in the contracting party (Montenegro), did not comply with the opt-out rules. Although the plant reached its limit of 20.000 working hours by the end of 2020, it did not comply with the stricter standards of the Industrial Emissions Directive, nor did it stop its operations, as required by EC legislation," the document reads in the framework of the case opened against Montenegro ( Case ECS 15/21).
On February 9, the Secretariat of the European Union published a reasoned opinion in which it was stated that the then Ministry of Capital Investments did not provide them with valid arguments that the operation of the TE will be harmonized with European rules. Montenegro is invited to correct the identified non-compliance issues within two months.
After carrying out the preliminary procedure, on July 13 this year, the Secretariat submitted a "reasoned request" to the Ministerial Council after Montenegro's failure to correct the identified problems.
In the proposed conclusions of the Council of Ministers of the EC, which will probably be adopted today, it is stated that the Advisory Committee of the EC has not yet issued an opinion in the case of Montenegro.
"The position that will be represented at the Ministerial Council should be the approval of the draft decisions, provided that the EC Advisory Committee submits an opinion supporting the conclusions of the EC Secretariat in a timely manner, ie before the meeting of the Ministerial Council," the proposal reads.
Mijović believes that even if the TE, through the ongoing technological reconstruction, reduces the emission of all harmful gases according to EU criteria, it does not meet modern technological standards, nor can it be thoroughly reconstructed to reach those standards because it is too old for that.
He reminds that the TE emits more than half of the CO2 that Montenegro would have to reduce by 2030 in accordance with the EU climate policy and the Green Development Agenda, which Montenegro must also adopt and implement if it wants faster admission to the EU, i.e. by the end of the decade, and maybe even sooner if it stands out.
Montenegro is obliged to the EC to reduce CO2 emissions by at least 55 percent by 2030.
Mijović warns that if Montenegro does not close the TPP by then, everything else would have to stop for that to happen, which is unrealistic.
"Therefore, even if the ecological reconstruction was carried out on time and fully aligned with the EU Directives, Montenegro would have to close the thermal power plant in order to comply with the EU climate policy. Nevertheless, Montenegro has not yet formalized its obligation to the EC and the EU, i.e. she did not adopt the Climate and Energy Plan, which was criticized in the Progress Report", he reminds.
According to him, as the fight against climate change accelerates and more and more radical measures are adopted to prevent it, it is hard to believe that TE will last until 2030.
"We lost precious years in insisting on the construction of the second block and ecological reconstruction instead of preparing a project that would have a new stable source of energy based on our own raw material, which works 24 hours a day like the existing thermal power plant. We have such in abundance, but we use it badly, I mean of course biomass", said Mijović.
Minister of Energy and Mining Saša Mujović this week, at a conference in the European House in Podgorica, he said that on its way to the EU, Montenegro will at one point have to give up its most important energy facility - the Pljevlja Thermal Power Plant.
“It will be anything but easy. For us, a significant relief and solution to the problem would be the construction of a stable energy source, that is, a hydroelectric power plant. My favorite is the hydroelectric power plant 'Kruševo', first of all because of its profitability, high power and good ratio of power and energy. In those aspects, it is better than the Komarnica project. There are also hydropower plants on Ćehotina", said Mujović, who will participate in today's EC ministerial meeting.
The Energy Community is an international organization that brings together the EU and its neighbors with the aim of creating an integrated pan-European energy market. The foundations of this organization were established by the adoption of the Agreement on the Establishment of the Energy Community (Treaty) signed in October 2005 in Athens, which has been in force since July 2006. The agreement was signed by Albania, Montenegro, Bosnia and Herzegovina, Kosovo, North Macedonia, Georgia, Moldova, Serbia and Ukraine.
The Council of Ministers of the EC is the highest decision-making body.
No one is responsible for mistakes, ignorance and incompetence
Dejan Mijović warns of the possibility that "due to many years of delay, mistakes, ignorance and incompetence of our elite", the TPP will have to be closed even before a new energy facility is built, which will cost citizens and the state very dearly.
"Of course, no one will be responsible for that, they will just move from the director's chair to other chairs, either parliamentary or ambassador's. Unfortunately, we cannot hope for anything better in the future if the new Minister of Energy remains of the position that the construction of the Kruševo hydroelectric plant is the best substitute for thermal power plants, because it is not a stable source of energy, not to mention other risky economic and ecological aspects of the construction of a new large hydroelectric plant . Let's hope, however, that he will fulfill his promise and, unlike his predecessors, initiate a serious public and professional debate on the choice of the most optimal replacement project for the TPP before the final decision," he said.
Mijović advises that the Government "do not break its head too much" after the decision that it has violated the international agreement on the establishment of the EC, but rather listen carefully to the recommendations of well-intentioned European partners.
"Quick entry into the EU is the best way to make a fair transition from coal, everything else is much more expensive," he said.
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