Dear citizens,
As the president of the EPCG Board of Directors, I have the obligation to inform you and remind you what we have done in the previous period and what we plan to do in the future. In this regard, in several texts I will try to bring you closer to what it is all about.
In the first text we did introduction to the story, we dedicated ourselves in the second some problematic decisions until 2021, in the third review relationship to the Thermal Power Plant before and after 2021 and the state of HPP Perućica and HPP Piva, in the fourth review of realization of the business philosophy "Produce where you spend", in the form of successful projects "Solari 3000+/500+" and "Solari 5000+", in the fifth state in connection with other important projects of our company, in the sixth we processed some important business processes and decisions of vital interest to the company's operations, in the seventh we gave an overview of important activities in connection with Ironworks. In this text we will refer to the prices of electricity in the past period, and in the eighth we referred to electricity prices in the past period. Now we have to answer the question - what next?
Although the institutions of the system did not adopt timely development strategies, so that the Energy Development Strategy from 2014 is currently valid, EPCG, with its policies and decisions, in the previous 42 months, tried to repair the almost irreparable damage from the previous 40 years of lagging, and managed to capture the connection in the energy transition. Today, we can freely say that we follow world trends in this area and without false modesty, we are leaders in the region in the energy transition.
Regardless of the clear vision of the development of electro-energetics, during the realization of certain projects we face objective and subjective difficulties, which significantly slow us down in their implementation.
The biggest problems accompanying the implementation of projects, apart from certain weaknesses, are complicated legal procedures. In the last couple of years, the Parliament of Montenegro, with certain amendments it adopted, small solar power plants are not auxiliary facilities, for power plants up to 1000 kW urban technical conditions (UTU) are not issued, enabled the accelerated implementation of certain projects. Disorganized public registers are also one of the problems that slow down the implementation of various projects. This primarily refers to undefined property-legal relations, i.e. undefined ownership structure, as well as slowness in the transfer of ownership. The well-known problem of illegal buildings also slows down the implementation of certain projects. They would also point out the lack of professional staff. The education system obviously did not follow the energy transition. We must also point out the slowness of the administration in making decisions, giving consent, prescribing conditions and so on and the like.
In particular, we would single out the Law on Public Procurement, which to a large extent prevents, or significantly slows down, the implementation of projects. This is not an excuse, but unfortunately a harsh reality. When creating technical documentation, it is impossible to predict all the details, including the procurement of equipment. Realization of the project is a living matter, and the acquisition of additional equipment is often required. Equipment that a private company can acquire in 2 days, EPCG needs 3 months, sometimes even significantly more. Even within the company, the procedures are quite complicated, and they stemmed from the obligation to comply with various laws. This usually leads to a rise in tension due to the slower implementation of projects, and to hearing comments that workers are not employed enough, that there is a surplus of employees and that various flaws are being sought. It could rather be said that the essential surplus was created, in the previous period, in the administration of energy companies. New employees are to the greatest extent involved in projects that create new value, or they have taken on tasks for which external companies were engaged in the previous period.
And here we must once again emphasize the significant costs and the significant outflow of funds, which greatly burden the operations of EPCG, and which the company cannot influence, such as the payment of energy to privileged producers, CO2 taxes, which are still significant, but which will to grow significantly in the future, the so-called G-component paid to CGES and the obligation to implement significant funds intended for the ecological reconstruction of TEP.
Observing all of the above, it can be unequivocally concluded that it is very difficult for a state-owned company to deal with investments and development, and that it is necessary to invest a lot of effort and work in order to realize certain projects. It seems that someone made a good effort, in the previous period, to make it difficult for state-owned companies to do business, obviously favoring the private sector.
These statements in no way mean that EPCG is not ready to cooperate with other entities, either private or state, all with the aim of strong development of electric energy in Montenegro. Within the scope of operations and implementation of projects in the field of energy, Elektroprivreda Montenegro continuously cooperates and promotes cooperation with the most important international partners (international financial institutions, investors, renowned design and consulting firms and equipment suppliers from the region, Europe and the world).
In the area of projects from renewable energy sources and energy as a whole, there is active cooperation with the most important international financial institutions: the European Bank for Reconstruction and Development - EBRD (projects VE Gvozd, PSE Slano, SE Krupac), the German Development Bank - KfW (projects for the reconstruction and modernization of HPP Piva and HPP Perućica, the project of installing aggregates A8 HPP Perućica) and the World Bank-WB group on the reclamation project of the Maljevac landfill.
Through the respective Memorandums of Understanding, cooperation with the following international companies that have shown interest in investing and developing projects in the field of energy in Montenegro is foreseen: UGT Renewables from the USA and Huyndai Engineering from South Korea (construction of SE and energy storage systems), EDF - Elektoprivreda France (strategic cooperation in the field of hydropower), Respect Energy from Poland (cooperation in the development of off-shore wind farms and facilities for the production of green ammonia and hydrogen), Power China from the Republic of China (cooperation in the field of RES), NTE from Norway (cooperation in the field of hydropower), Akuo Energy and Qair International from France (construction of SE and battery systems).
In order to make maximum use of the energy potential that Montenegro has, and to remediate the inaction and backwardness that was expressed in the previous 40 years, and for energy to become a locomotive of economic development, it is necessary to have a clear vision of development and to establish complete cohesion of all institutions , starting with the Parliament of Montenegro, the Government, local governments and energy companies.
The time factor is extremely important. Of course, it is necessary to plan strategically and make maximum use of the energy potential. Projects related to the construction of hydro and gas power plants require a significant period of time, and Montenegro does not have time to wait, because the consequences could be catastrophic. We must also be aware of the fact that, as we move closer to the European Union, the costs of producing electricity from coal, due to various taxes, will rise radically. That price is already over €60/MWh. In the end, the question of the profitability of production in this way will be raised. That is why we must make maximum use of the existing energy infrastructure and connect as many solar and wind power plants as possible to it, as well as battery systems. For 1MW of new OIE (renewable electricity source), a minimum of 1MWh of BESS (battery-electric storage systems) must be installed. This is, perhaps, the only chance to stabilize the energy system relatively quickly and to cancel decades of delay.
Following the above-mentioned postulates, regardless of all the obstacles and difficulties we face, today EPCG has a clear vision of development, namely through projects whose implementation has already started, or is completely certain, with relatively quick implementation:
- Continue the construction of solar power plants according to the principle, produce where you spend, 3.000+/500+, 5.000+, 10.000+
- Intensify the construction of larger solar power plants, using hydro-energy infrastructure for their connection, SE Željezara, SE Ozrinići, SE Krupac, SE Kapino Polje, SE brana Vrtac, SE dam Slano, SE brana Krupac, SE RUP,...,
- Urgently start the installation of larger ones battery electric storage systems (BESS), using the built electrical energy infrastructure for their connection to the grid (Steelworks, HPP Perućica, Thermal Power Plant Pljevlja,...)
- Accelerate the construction of the Gvozd I wind farm, with a capacity of 54MW, and at the same time continue the implementation of the Gvozd II wind farm, with a capacity of 30MW
- Accelerate the project, more efficient valorization of the waters of the Nikšić field, by connecting the Krupac and Slano lakes and transferring the flood wave of the Zeta river to Krupac, in order to increase the production of HPP Perućica, and the already certain installation of the 8th unit, with a power of 58 MW, would be even more profitable
All these projects could be realized in the next 3 years, some in 2024 and 2025, some in 2026 and 2027. Realization of these projects is IMPERATIVE, and it is a chance that should not be missed. Otherwise, the consequences are unpredictable.
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Also, projects have been launched, or will be launched, the realization of which is very important for the stability of the electric power system, but for the realization of which a longer period of time will be necessary,
- To continue, already started, the implementation of the HPP Kruševo project,
- Activate the KOMARNICA HPP construction project, which has been idle for a long period of time,
- It is necessary to strengthen the activities on the preparation of documentation related to the potential construction of gas power plants,
- To consider the construction of cascade power plants, without endangering the bed, on the Morača River,
- Floating solar power plants on Slan and Piva lakes.
EPCG will make an effort to establish a more responsible way of management in its organization in the coming period, where all managers and employees will have defined goals, for the realization of which they will bear full responsibility. We will remain maximally open to the reception of young and educated personnel, as well as to all ideas and suggestions that will contribute to the development of electrical energy in our country.
Dear citizens,
I hope that with this series of texts, on behalf of EPCG, I have provided answers to the most important questions and clearly pointed out all the problems that our company faced and is facing. You can also notice that we have launched a large number of projects, from which both citizens and EPCG are already benefiting significantly. The development of energy is a great opportunity for the development of Montenegro and we must not miss it. EPCG will make a maximum contribution to take advantage of this opportunity.
