Amendments to the Energy Law adopted in 2020 fulfil the last remaining condition for unbundling of the transmission system operator. The distribution network operator is unbundled in accordance with the acquis.
Access to the system
Access to the system
Transparent and non-discriminatory access to the system is ensured by published tariffs for connection and use of the .Connection Network Codes are transposed, but not implemented yet. The Transparency Regulation is transposed and partially implemented.
The wholesale market is open for competition, including the balancing market, except for the balancing reserve. Concentration is very high, despite the fact that a seat requirement for trade does not exist. A timeline for day-ahead market establishment and coupling is defined by the latest amendments of the Energy Law, but actual progress is slow. The REMIT Regulation is not transposed.
Although the retail market is formally deregulated, only the incumbent is supplying end-customers and, as the supplier of last resort selected in a market-based procedure, performs the public service obligation to supply small customers and households.
The transmission system operator participates in regional balancing cooperation and coordinated capacity calculation, but key outputs are yet to be achieved. Similarly, the regional market coupling project is still being designed but not implemented. The amendments to the Energy Law set the basis for the full transposition of the CACM Regulation.
State of compliance
The commissioning of the undersea cable between Montenegro and Italy with 600 MW of capacity marked the reporting period in Montenegro. The transposition of Connection Network Codes and the designation of the supplier of last resort in a competitive procedure were the main steps towards further electricity sector liberalization. This development was facilitated by an amendment to the Energy Law adopted in July 2020, which removes the last obstacle for transmission system operator unbundling and sets the legal basis for functioning of organized day-ahead
and intraday markets.
The transmission operator CGES, owned by the State and the Italian transmission system operator Terna, was conditionally certified. Amendments to the Law, adopted in July 2020, ensured a compliant separation of control in line with the regulator’s and the Secretariat’s conditions. Distribution is performed by CEDIS, a legally unbundled undertaking owned by the electric power distribution company EPCG. Functional unbundling was implemented in a compliant manner. Transmission and distribution tariffs were set pursuant to the methodologies for the regulatory period 2020 - 2022 in December 2019. The transmission tariff charged to generators connected to the transmission network continues to exceed the maximum value allowed by Regulation (EU) 838/2010.
The Government adopted two decrees ensuring the transposition of the Connection Network Codes as well as a decree on requirements for connection of electricity generators to the transmission and distribution networks. The implementing rules for network operators have not yet been amended accordingly. The Transparency Regulation is transposed and partially implemented. The existing system for data collection and publication
is currently being improved.
The wholesale market is fully deregulated. Operations on the wholesale market are managed by the electricity market operator COTEE. Amendments of the Energy Law of July 2020 brought the necessary legal basis for the functioning of the power exchange and defined the roles and responsibilities of the nominated electricity market operator, the transmission operator and the regulator in the market coupling process. The power exchange company BELEN is yet to establish a day-ahead market. The national balancing market functions. In addition to the incumbent generation company EPCG, which acts as a balancing service provider, a contract for providing balancing services was signed with an industrial customer. According to the current methodology, the balancing reserve price is to be set by the regulator until sufficient competition is in place. The price of balancing energy is not regulated, and a cross-border market-based exchange of balancing energy is still implemented only with the transmission system operators of Serbia and Bosnia and Herzegovina on a bilateral basis. The REMIT Regulation is envisaged to be adopted as a separate law by the end of 2020.
In the retail market, all customers are eligible to choose their supplier. The Energy Law allows recognition of retail supply licenses of undertakings established and licensed in another Contracting Party or an EU Member State. However, final customers are still supplied by the incumbent EPCG, the only active supplier. Since June 2019, EPCG offers to customers the choice of different tariff models, with the aim to encourage energy efficiency and reduce costs. Until 30 June 2020, 12% of end-customers, who signed supply contracts with EPCG, opted for a new supply package. The supply of last resort is defined as a public service obligation imposed on EPCG selected in a tender procedure. The price charged by the supplier of last resort to households and small customers is based on the market price subject to price increase restrictions set by the regulator. Vulnerable customers are also supplied by the supplier of last resort. A Government decree, effective from 2019 onwards, defines a vulnerable customer and sets up a protection mechanism, including a 50% subsidization of monthly bills for consumption up to 600 kWh per month.
SEE CAO performs joint capacity allocation for CGES for the interconnections with Italy, Albania and Bosnia and Herzegovina. Rules for allocation of interconnection capacity with the Serbian electricity system are approved by the regulator. Montenegro is participating in a market coupling project with Albania, Italy and Serbia (AIMS), which is still in an early phase.