Montenegro

New Project for Promotion of Small Hydro Power Development in Montenegro

As an environmentally and politically acceptable way of reducing the country’s dependence on energy imports, the Government of Montenegro adopted the Small Hydro Development Strategy in April 2006. Renewable source of energy such as small hydro power plants, developed with respect to the socio-economic and environmental criteria, are a new economic sector for Montenegro with growth potential. The Project ‘Power Sector Policy Reform to Promote Small Hydro Power Development in the Republic of Montenegro’ will support the Government in realizing its goal of 15 to 20 MW of new small generating capacity by the close of the project in 2012, instead of 2015 as declared by their strategy. Furthermore, this project will support the Government in securing that additional capacity in a more cost effective and economically responsible manner, and therefore in a more politically sustainable manner. In so doing the project will avoid 402,360 to 536,480 CO2 eq in green house gases emissions over the 20 year life of the new small hydro generating facilities. The Project will do this by supporting the Government of Montenegro in streamlining and simplifying the application procedures for small renewable independent power producers; collecting basic data to make investment decisions; by setting attractive but competitive business terms and conditions for investors; and providing assistance to the Ministry for Economic Development role out a streamlined and transparent tendering process.

“Montenegro has large, but mostly unused hydro power potential,“ H.E. Mr. Branimir Gvozdenović, Minister for Economic Development stated after the signing ceremony. “Theoretical hydroenergy potential for constructing small hydro power plants is around 1,000 Gigawatts per year, excluding the rivers Tara, Ćehotina and Ibar, but the realistic estimation is that around 400 Gigawatts could be used. That means Montenegro could cover around 25% of this year’s power import by using the energy generated from small hydro power plants.“ He reminded that the Government granted concessions for 7 watercourses in May, and granting of a concession for one more watercourse was underway. „In accordance with this, professional services of the Ministry have, in cooperation with colleagues from abroad, reviewed the tender documentation and are getting prepared for a new tender for construction of small hydro power plants. In upcoming period we also hope to fix the shortcomings with the previous tender,“ said Minister Gvozdenović.

“The Project ‘Power Sector Policy Reform to Promote Small Hydro Power Development in the Republic of Montenegro’ will support the Government in realizing its goal of 15 to 20 MW of new small generating capacity by the close of the project in 2012, instead of 2015 as declared in the Small Hydro Development Strategy. Within this framework UNDP will help in creating the environment for private sector to develop renewable sources of energy that are a mechanism for reduction of Montenegro’s dependence on imported electricity and combating climate change through reduction in CO2 emissions,” said Mr. Alexander Avanesov, UN Resident Coordinator and UNDP Resident Representative to Montenegro. “While reducing green house gasses emissions by creating favorable legal, regulatory and market environment, the project will support the Government in realizing the goals with the following impact: clear business procedure for investors; at least 4 small hydro power operational; reduction of min 400.000 t CO2 in Green House Gases emissions; potential for new jobs in operation, maintenance and related sectors,” Mr. Avanessov emphasized.

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Small hydro plant is an efficient, secure, clean, renewable and sustainable resource. Has benefit on economy of local communities. Produces new jobs, improves living conditions. It is estimated that about 10 000 (1) employees are working – directly and indirectly – in the EU-15 small hydro sector. Predictions by the European Renewable Energy Council suggest that European employment in the small hydro sector could potentially reach 15,000 and 28,000 for direct and indirect jobs respectively.

The use of hydropower is a leading renewable energy source in the EU. It now accounts for about 84% of the electricity generation from renewable sources and for 13% of total electricity production in the EU.

Small hydro has an environmental impact 300 times lower than the one produced with lignite; 250 times lower in relation with the one generated with coal or petroleum; 125 times lower in relation with the one produced with uranium; 50 times lower than the one generated with natural gas.

(1) Source: European Small Hydro Association – ESHA