State of compliance
The transmission system operator was conditionally certified by the national regulatory authority in 2018, following the Secretariat’s positive Opinion 01/2018. The condition to appoint a compliance officer and to initiate amendments to the Law or an enabling regulation to ensure the separation of control in line with the certification decision is implemented by the transmission system operator. The amendments of the Law, proposed by the transmission system operator, were approved by the Ministry of Economy, however, the Law has not been amended yet.
Unbundling of the distribution system operator, Crnogorski elektrodistributivni sistem (CEDIS), was completed in compliance with the acquis. Elektroprivreda Crne Gore (EPCG) established CEDIS in 2016 as a separate legal entity to operate, maintain and own the distribution network and identified its assets, staff and management structure. The regulatory authority has approved the compliance programme of CEDIS and the appointment of a compliance officer. The first compliance report confirmed that the distribution system operator’s behaviour was in conformity with the Law and the compliance programme. Rebranding was done in a compliant manner.
RAE adopted the rules for the operation of a closed distribution system and the applicable exemptions.
Access to the system
Access to the system
The Energy Law requires network operators to grant non-discriminatory access to the transmission and distribution networks unless the provision of public services is endangered. RAE has developed network tariff methodologies for transmission and distribution system operators, as well as for the market operator.
The regulator adopted the rulebook on the conditions for construction of direct lines in line with the acquis.
SEE CAO performs joint capacity allocation for Crnogorski elektroprenosni sistem (CGES) on a yearly, monthly and daily basis for the interconnections with Albania and Bosnia and Herzegovina. CGES applies Rules for Allocation of Interconnection Capacity through annual, monthly, weekly and intraday split auctions of interconnection capacities with the Serbian electricity system.
The wholesale market is fully deregulated, including the generation of electricity which is not subject to price regulation. Operations on the wholesale market are performed within the framework managed by Crnogorski operator trzista elektricne energije (COTEE), where 39 market participants are registered.
The legislative framework needed for establishing the organised electricity market is set by the 2015 Energy Law and the Law on Cross-border Exchanges of Electricity and Natural Gas adopted in 2016.
The company responsible for establishing a power exchange, set up by COTEE, CGES and EPCG in August 2017, selected in a competitive procedure a strategic partner. The process is still to be completed with the signing of a contract on strategic partnership with Nordpool. For a power exchange to start operation, expected in 2020, other preconditions have to be met, including the harmonization of value added tax legislation. The necessary amendments of the VAT Law have been drafted.
The national balancing market is functional. In addition to the incumbent generation company EPCG, who is acting as a balancing service provider, a contract for providing balancing services was signed with an industrial customer. Imbalance settlement is applied to all market participants in a non-discriminatory manner. According to the current methodology, prices of balancing reserves will be regulated until a competitive balancing market is in place. The price for balancing reserves for the period 2017 - 2019 has been set by a decision of RAE from 2016. The balancing energy price is not regulated, and a cross-border market-based exchange of balancing energy is applied.
Regulation (EU) 543/2013 on market data transparency is transposed in a compliant manner by the Rulebook on information provided by the transmission system operator and the manner of submitting and publishing data with electricity market relevance, adopted by the Ministry of Economy in March 2018.
The retail market is fully deregulated and all customers are eligible to choose their supplier. The conditions and procedure for supplier switching are defined by rules developed by RAE.
However, liquidity on the retail level is low. The rather small and highly concentrated retail market makes supplier switching unattractive. In practice, there are currently six licensed suppliers of end-customers. Still, most customers continue to be supplied by the incumbent supplier at unregulated prices. Prices are regulated only for vulnerable customers, in line with the methodology based on the reference market price.
No additional actions were taken to improve competition in the retail market.
A supplier of last resort has not been appointed yet in a competitive procedure, as required by the Law. The Government adopted the rules to conduct the selection procedure. The selection procedure, initiated in the course of 2019, to award the contract for provision of universal service, supply to vulnerable customers and reserve supply has not been completed yet.
The Energy Law transposes the acquis requirements for customer protection as well as a system for the protection of vulnerable customers. However, the deadline for the adoption of specific rules for vulnerable customer protection was missed. The draft was prepared by the Ministry in charge and submitted for interdepartmental consultations, but its adoption is pending.
The Law required that at least 85% of customers are equipped with a modern metering system. By 2018, CEDIS installed multifunctional meters with automatic management at 78% of metering points, with the aim to achieve compliance with the Law in the course of 2019.
The Montenegrin transmission system operator is a shareholder of SEE CAO and the Security Coordination Centre (SCC), which was established together with the transmission system operators of Bosnia and Herzegovina and Serbia in August 2015. Coordinated capacity calculation is still missing.
Concrete steps towards coupling with neighbouring markets await the conclusion of the agreement with the selected strategic partner. Montenegro is participating in the project for coupling of its market with those of Albania, Italy and Serbia (AIMS). However, a roadmap for the project’s implementation has not been adopted.
The transmission system operator is exchanging balancing energy from a manual frequency restoration reserve on a bilateral basis with the transmission system operators of Serbia and Bosnia and Herzegovina. Implementation of regional balancing cooperation, including imbalance netting in the first place, is still pending.
No progress has been achieved in establishing cooperation with the Albanian transmission system operator yet.
Connection Network Codes have been transposed. On 4 April 2018 the Government adopted Decree on requirements for customer facility connection to the electricity transmission system and the Decree on requirements for grid connection of high voltage direct current systems and direct current-connected power park modules, ensuring transposition of Regulation (EU) 2016/1388 and Regulation (EU) 2016/1447.
The Energy Law allows for the recognition of retail supply licenses of undertakings established and licensed in another Contracting Party or an EU Member State, whereas wholesale supply does not require licensing in Montenegro.