Montenegro GENERAL INFORMATION The population of Montenegro on 1 January 2021 was 620,739. 194 Its gross domestic product per capita in pur­chasing power standards in 2020 was only 46 per cent of the EU average. 195 In 2019, the proportion of the popula­tion at risk of poverty or social exclusion was 30.5 – approx­imately 50 per cent above the EU average for the same year. 196 In 2020, 55.2 per cent of the working-age popula­tion was employed. 197 After decades of rule by the Democratic Party of Socialists (DPS), in 2020 Montenegro held parliamentary elections and a new government was elected. This further polarised the political situation between the ruling party and the op­position. It also complicated the energy transition as the new coalition government took several months to get to grips with key issues and replaced several key directors in public companies. As of late 2021, the ruling coalition ap­pears quite unstable. ENERGY TRANSITION SNAPSHOT Montenegro’s electricity needs are mainly met by the 225 MW lignite power plant at Pljevlja and the 307 MW Pe­ru ć ica and 342 MW Piva hydropower plants. It also has two operating wind farms but has barely touched its solar poten­tial yet. A huge solar farm is planned but has been delayed. 198 In 2019, 37.37 per cent of gross final energy consumption came from renewable sources, exceeding the 33 per cent target to be achieved by 2020 under the Energy Commu­nity Treaty. This overshoot was mostly connected to a re­vision of biomass data rather than because of significant investments. 202 However, Montenegro’s share of renewa­bles has been falling since a 2014 peak of 44 per cent, ap­parently due to a declining share in the heating sector. 203 Montenegro is relatively advanced in transposing EU ener­gy efficiency legislation. A long-term building renovation strategy is still missing but several renovation programmes are ongoing. An Eco Fund has been set up to finance en­ergy efficiency and environmental measures, including residential energy efficiency. However, Montenegro’s fi­nal and primary energy consumption both went up in 2019. 204 Even though Montenegro has no access to international gas infrastructure, the government adopted a Master Plan for the Development of the Gas Transport System of Mon­tenegro in 2017, which explores the possibility of building the Ionian-Adriatic Pipeline(IAP) to connect to the Trans Adriatic Pipeline(TAP). In addition, in 2020 the amended Energy Law created a regulatory framework for a liquefied natural gas(LNG) terminal, which is not connected to any gas network. 205 Both of these risk distracting Montenegro from more far-sighted, inclusive and sustainable energy transition measures. In late 2020 the new government got a surprise, as the Pl­jevlja coal power plant was already operating illegally after exceeding the number of operating hours allowed under the so-called‘opt-out’ regime set by the Large Combustion Plants Directive. 199 Montenegro has been considered a‘frontrunner in imple­menting energy sector reforms in the Energy Community for years’, 200 but this ongoing non-compliance by the Pljev­lja coal plant is impairing this record, 201 as is the govern­ment’s indecision on what to do about it. Besides its dependency on coal for 40 to 50 percent of its electricity, Montenegro’s hydropower plants depend on fluctuating rainfall levels, causing serious annual fluctua­tions in electricity generation. 194 Eurostat, Population on 1 January(DEMO_GIND), accessed 8 Decem­ber 2021. 195 Eurostat, GDP per capita in PPS(PRC_PPP_IND), accessed 8 December 2021. 196 Eurostat, People at risk of poverty or social exclusion(ILC_PEPS01), accessed 8 December 2021. 197 Eurostat, Employment rate by sex, age group 20-64(LFSI_EMP_A), accessed 8 December 2021. 198 Portalanalitika, Kasni ć e Briska gora, EPCG gradi novu mini hidroelek­tranu, 18 November 2021. 199 CEE Bankwatch Network, Comply or Close. 200 Energy Community Secretariat, Montenegro Annual Implementation Report for 2020, November 2020. 201 Energy Community Secretariat, Implementation Report 2021. The country’s NECP is currently under development but has not been published yet. Its contents will largely depend on the future of the Pljevlja coal plant, which has to be either closed or modernised, as well as on discussions about gas development. In 2021 Montenegro joined the Powering Past Coal Alliance and committed to stop using coal by 2035 at the latest, 206 but it seems highly unlikely that the Pljevlja plant will be economic to operate by then anyway, and the question is more whether it is worth investing in its modernisation at all. INCLUSIVE ENERGY TRANSITION JUST TRANSITION Since the previous government planned to go ahead with a modernisation project at the Pljevlja power plant, which they hoped would enable the plant to run for at least 15 more years, discussions about a just transition have been very much delayed in Montenegro. It is only thanks to 202 Energy Community Secretariat, Implementation Report 2021. 203 Energy Community Secretariat, Implementation Report 2021, ­November 2021. 204 Energy Community Secretariat, Implementation Report 2021. 205 Energy Community Secretariat, Montenegro Annual Implementation Report for 2020. 206 Balkan Green Energy News,‘Montenegro announces coal phaseout by 2035’, Balkan Green Energy News, 1 July 2021. 39