Drought Adds to Montenegro’s Energy Problems

After a lack of rainfall “endangered” the performance of the Piva and Perucica hydroelectric plants, Montenegro has had to import 50 per cent more energy in 2011 compared to last year, Elektroprivreda Crne Gore, EPCG, announced on Wednesday.

“Projections by the end of the year are not at all optimistic”, the company added, referring to weather forecasts by the Montenegrin Hydro-meteorological Institute, which say 2011 will be one of the driest years ever recorded since the institute started taking measurements in Montenegro.

EPCG also noted electricity price rises in the regional and European market, which are reportedly 20 per cent higher on average this year compared to last year.  “These additional expenses create a very difficult financial situation in which expenses are higher than incomes,” EPCG said.

To deal with the costs of additional imports and “for the system to remain sustainable”, EPCG announced it would taker harsher measures against non-paying consumers.

The former state monopoly, now partially privatized by Italy’s A2A, announced it would set up special teams to visit all households who had failed to pay their electricity bills.

They would be offered the possibility of payment in monthly instalments. If they still fail to pay, their electricity will be shut off.

The Montenegrin government owns 55 per cent of EPCG while management of the company is in hands of the Italian A2A, which owns 43 per cent of its shares.

In recent years Montenegro has had to import about a third of the energy it consumes, while gross energy consumption is rising about 3 per cent annually, according to government data.

Further development of hydropower potential is amongst the main goals of the National Energy Strategy, approved in 2007.

The major project announced in this strategy, the construction of four cascade dams on the Moraca river, was recently put on hold following the failure of the tender. None of the qualified bidders presented offers in the end.

A consortium of A2a and EPCG was amongst the qualified bidders for the Moraca dams tender but they backed off from proposing an offer, saying the existing version of the project was not profitable.

The government has announced the possibility of assigning the project directly to EPCG.