Montenegrin state-owned utility EPCG expects to be granted additional operating hours for the 225MW Pljevlja lignite-fired plant, which had been due to close last year.
EPCG expects negotiations between the Montenegrin government and regional regulatory body the Energy Community over granting additional operating hours to be completed by the end of Pljevlja's annual overhaul, which is due to last until 1 June, EPCG's new executive director, Nikola Rovcanin, said.
The utility expects a positive outcome from the negotiations owing to the importance of Pljevlja to Montenegro's power system and the negative effects that would come with its closure. The country would need to spend around €80mn ($96mn) on power imports, Rovcanin said, in the event that Pljevlja was unable to resume operating between 1 June and July 2022, when it is expected to complete upgrades intended to bring the plant in line with newer emissions regulations that would allow it to operate freely again.
And the impacts of the Covid-19 outbreak, which delayed the start of the environmental upgrades at the plant, could also impact the decision, Rovcanin said.
Pljevlja opted out of the EU's Large Combustion Plants Directive (LCPD), meaning it is only allowed to operate for 20,000 hours from 2018-23, after which it is required to close or be upgraded to meet the EU's best available techniques reference (BREF) standards.
But Pljevlja ran for a total of 21,003 hours in 2018-20, exceeding its limit around November. The plant continued to operate until shutting for annual maintenance at the start of this month.
EPCG did not confirm that the plant had exceeded its allowed operating limit last year until operational data were reported to the European Environment Agency at the end of last month. A change in government in Montenegro in December has further confused matters, with the previous government having announced no plans for what would happen if Pljevlja was forced to cease generating.
Environmental organisation CEE Bankwatch Network has called on the Energy Community to begin an infringement procedure against Montenegro for the continued operation of Pljevlja. The group said that extending the plant's operating hours would set a "worrying precedent if not tackled". Neither the Energy Community Secretariat nor the European Commission are able to grant additional hours to Pljevlja as this falls outside of their mandates, the group said, adding that such a move would require amending the LCPD.
Furthermore, EPCG has not publicly shown that its current modernisation plans would actually bring Pljevlja up to the required BREF standards, or that it is economically justified, CEE Bankwatch Network said.
Several other lignite-fired units in the Balkans are approaching the end of their operating limits, including Bosnia's 110MW Kakanj 5 unit, which had used 13,880 hours by the end of 2020, and the country's 200MW Tuzla 4 unit, which was on 14,239 hours. These would both need to close before 2023 or reduce output compared with previous years to avoid exceeding their limits, but could be disincentivised to do so if there were no repercussions for Pljevlja's non-compliance with the LCPD.
