Pursuant to Article 20, Paragraph 2 of the Energy Law (“Official Gazette of Montenegro”, No.
28/10, 6/13 and 10/15), the Government of Montenegro adopted
DECREE
ON THE TARIFF SYSTEM FOR DETERMINING THE INCENTIVE PRICES
FOR ELECTRICITY PRODUCED FROM RENEWABLE ENERGY SOUCES
AND HIGH EFFICIENCY COGENERATION
("Official Gazette of Montenegro", No. 52/11, 28/14 and 79/15)
Article 1
This Decree shall regulate the tariff system for incentive prices for electricity produced in
power plants using renewable energy resources and power plants for high efficiency
cogeneration.
Meaning of Terms
Article 2
The terms used herein shall have the following meaning:
1) installed capacity means a sum of active capacities of all generators within a plant;
2) incentive prices refers to the purchase price that is paid to a privileged producer of electricity
in plants using renewable energy resources or power plants for high efficiency cogeneration in
accordance with a contract to purchase electricity;
3) produced electricity refers to electricity produced in power plants using renewable energy
resources or power plants for high efficiency cogeneration, measured on the point of delivery to
the electric power network;
4) system of power plants means all power plants using renewable energy resources with
individual measurement points at the exit of every plant, which has one or more common points
of connection to the electric power network.
5) net power output of power plant is active power at the exit from the plant.
Incentive prices
Article 3
A producer shall be entitled to incentive prices for electricity produced if:
- the power plant using renewable power resources contributes to the fulfillment of the national
targets for use of renewable energy sources in compliance with the renewable energy source
usage and development program, or
- the power plant for high efficiency cogeneration has the capacities that are in compliance with
the program for usage and development of high efficiency cogeneration and
- if the producer has acquired, for the given power plant, the status of privileged producer in
accordance with the regulation governing the manner in which such status is acquired and the
rights of a privileged producer exercised.
Incentive prices for electricity produced in plants using
renewable energy resources
Article 4
The incentive prices, expressed in c€/kWh, for electricity produced in plants using renewable
energy resources, and calculated on the basis of the tariff system of incentive prices for
electricity produced in plants using renewable energy resources and in plants for high efficiency
cogeneration (hereinafter: the tariff system), which constitutes an integral part of this Decree,
shall be as follows:
Wind power plants
Power plants using solid biomass
from forestry and agriculture
from wood-processing industry
Power plants using solar energy
on buildings and engineering constructions
Power plants using solid waste
Power plants using waste gas
Power plants using biogas
9,60
13,71
12,31
12,00
9,00
8,00
15,00
Incentive prices for electricity produced in small
hydropower plants
Article 5
The incentive prices, expressed in c€/kWh, for the electricity generated in small hydropower
plants classified into groups shall be determined depending on the net power output of power
plant in the manner indicated in the table below:
Net power output of power plant [MW]
Group Incentive prices [c€/kWh]
net power output of power plant Ppe < 1MW
1
10.44
net power output of power plant 1 ≤ Ppe < 3 MW
2
10.44 - 0.7*Ppe
net power output of power plant 3 ≤ Ppe< 5 MW
3
8.87 - 0.24*Ppe
net power output of power plant 5 ≤ Ppe< 8 MW
4
8.35 - 0.18*Ppe
net power output of power plant 8 ≤ Ppe ≤ 10 MW
5
6.8
In the formula referred to in paragraph 1 of this Article Ppe is net power output of power plant
expressed in MW.
Net power output of power plant shall be calculated by using the following formula:
Ppe= Pt* Ƞt*Ƞg*Ƞtr
where:
Pt - stands for the sum of nominal powers of all turbines in the plant [MW];
Ƞt - stands for efficiency of the turbine in the amount of 0.90;
Ƞg - stands for efficiency of generators in the amount of 0.96;
Ƞtr - efficiency of transformers in the amount of 0.99.
The incentive prices referred to in paragraph 1 of this Article shall be determined on the basis of
the Tariff System.
The incentive prices for the electricity generated in a small hydropower plant that has been
built on the existing infrastructure (pipeline and/or dam) shall be calculated at the rate of 80 % of
incentive prices referred to in paragraph 1 of this Article.
Incentive prices for electricity produced in plants for high efficiency cogeneration
Article 6
The incentive prices, expressed in c€/kWh, for electricity produced in plants for high efficiency
cogeneration relative to installed capacity shall be as follows:
Installed capacity of up to 1 MWe
Installed capacity from 1 MWe up to 5 MWe
10,00
To be calculated using
the
following formula:
Installed capacity from 5 MWe up to 10 MWe
8,00
The letter P in the formula referred to in Paragraph 1 of this Article stands for the installed
capacity of a power plant expressed in MWe.
The incentive prices from Paragraph 1 of this Article have been determined on the basis of the
Tariff system.
Incentive prices for electricity produced in a reconstructed plant
Article 7
The incentive price for electricity produced in a reconstructed plant, using renewable energy
resources, or a plant for high efficiency cogeneration, shall be obtained for the overall amount of
the annual electricity production.
The incentive price referred to in paragraph 1 of this Article for reconstructed plants shall be
calculated in accordance with Articles 4, 5 and 6 of this Decree.
Contract to purchase electricity and indexation of incentive prices
Article 8
Mutual rights and obligations of the producer that fulfils conditions set for entitlement to incentive
prices referred to in Article 3 this Decree and those of electricity market operators shall be regulated
under the power purchase agreement.
The incentive prices for the electricity generated in plants that use renewable energy resources and
plants for high efficiency cogeneration shall be adjusted annually by means of inflation rate for the
previous year.
Adjustment of prices resulting from inflation shall not be carried out in the year in which power
purchase agreement was concluded.
The incentive prices shall be adjusted as a result of inflation, as follows:
i 

Ctg  C pg  1  pg 
 100 
where:
Ctg – stands for incentive prices for the current calendar year [c€/kWh];
Cpg – stands for the incentive prices for the previous calendar year [c€/kWh] and
ipg – stands for annual inflation rate for the previous year published by the state administrative body
competent for statistics, expressed in percentages [%].
Payment of incentive prices and submission of data
Article 9
The incentive prices for electricity produced shall be paid monthly by the market operator to
the privileged producer on the basis of a concluded contract to purchase electricity.
Prior to the payment referred to in Paragraph 1 of this Article, the privileged producer shall
submit to the market operator guarantees of origin for the total electricity production for which
the incentive prices have been obtained.
The operator of the transmission, i.e. distribution system shall submit to the market operator
data on electricity produced in a plant for which the energy undertaking acquired right to
incentive prices, not later than by the 15th day of the current month for the previous month.
Payment of incentive prices for electricity produced in a system of plants
Article 10
The incentive prices for electricity produced in a system of plants shall be paid proportionally
to the sum of respective volumes of electricity measured at the point of exit of individual plants
in the system.
Cessation of application
Article 11
After entry into force of this Decree, the Instruction on the methodology of calculation of
purchase price of electricity produced in small hydropower plants (“Official Gazette of
Montenegro“, No. 46/07) and the Rulebook on the methodology applied to the calculation of
purchase price of electricity produced in wind power plants (“Official Gazette of Montenegro“,
No. 27/10) shall cease to apply.
Final provision
Article 12
This Decree shall enter into force on the eighth (8th) day after its publication in the “Official
Gazette of Montenegro”.
ANNEX 1
Tariff system of incentive prices for the electricity generated in plants that use
renewable energy resources and plants for high efficiency cogeneration
The incentive prices for the electricity generated in plants that use renewable energy resources and
plants for high efficiency cogeneration (C, [c€/kWh]) shall be calculated on the basis of the tariff items for
actual return on investment (TSINV, [c€/kWh]), operation and maintenance (TSRO, [c€/kWh]) and fuel
TSGOR, [c€/kWh]) costs, by using the following formula:
C  TSINV  TSRO  TSGOR
Tariff item for actual return of investment costs shall be determined according to the type and
classification of the plant that uses renewable energy resources or plant for high efficiency cogeneration
by using the following formula:
TS INV


i

I
100


1
t EKV  1 

i T

(1 
)
100









where:
I
- stands for specific investment costs (which include costs of preparation of technical
documentation, those of obtaining necessary documents, costs of construction of
facilities and equipment used in the plant, those of infrastructure etc.); [c€/kW];
tEKV - stands for annual operation time at maximum power [h/year];
I
- stands for discount rate [%] and
T
- stands for validity period of the power purchase agreement [year].
Constant values in calculation of the tariff item are discount rate, i = 8 % and validity period of the
power purchase agreement, T = 12 years, whereas other values shall be variable depending on the type
and classification of the plant.
Tariff item for operation and maintenance represents an estimate of the plant operation and
maintenance costs depending on the type and classification of such plant and shall be calculated by
using the following formula:
TSRO 
c RO
t EKV
where:
cRO - stands for specific annual operation and maintenance costs [c€/kWyear].
Tariff item for fuel shall represent costs of purchasing the fuel required for operation of the plant
depending on the type of plant.
Input values dependant on the type and classification of the plant using renewable energy resources
or plant for high efficiency cogeneration that are required for calculation of the tariff items for actual return
of investment costs and tariff items for operation and maintenance of the plant are indicated in Table 1.
Table 1. Input values for calculation the tariff item for actuall return on investment and tariff item for
plant operation and maintenance
I
tekv
[c€/kW]
[h/year]
Plants that use renewable energy resources
Wind power plants
140,000
2,300
Power plants using solid biomass
from forestry and agriculture
350,000
5,000
from wood processing industry
350,000
5,000
Solar power plants
on buildings and building structures
120,000
1,500
Power plants using solid waste from landfills
265,000
6,000
Power plants using waste gas
185,000
6,000
Power plants using biogas
420,000
5,700
Small hydropower plants
net power output of power plant Ppe < 1MW Group 220,000
3,500
1
net power output of power plant 8 ≤ Ppe ≤ 10 MW- 145,000
3150
Group 5
Plants for high efficiency cogeneration
Installed capacity below 1 MW
250,000
6,000
Installed capacity from 5 to 10 MW
190,000
6,000
Plant type
cRO
[c€/kWyear].
3,500
13,500
13,500
2070
18,815
17,482
29,400
7350
2205
17,000
12,920
Values of the tariff items used for calculation of the incentive prices referred to in Article 4 paragraph
1 of this Decree depending on the type and classification of the plant that uses renewable energy
resources are indicated in the following table.
Table 2. Tariff items for calculation of the incentive prices referred to in Article 4 of this Decree
Plant type
Wind power plants
Power plants using solid biomass
from forestry and agriculture
from wood processing industry
Solar power plants
on buildings and building structures
Power plants using solid waste from landfills
Power plants using waste gas
Power plants using biogas
TSINV
[c€/kWh]
8.08
TSRO
[c€/kWh]
1.52
TSGOR
[c€/kWh]
0.00
9.29
9.29
2.70
2.70
1.72
0.32
10.62
5.86
4.64
9.78
1.38
3.14
3.36
5.16
0.00
0.00
0.00
0.06
The incentive prices for the electricity generated in small hydropower plants referred to in Article 5 of
this Decree shall be calculated on the basis of tariff items indicated in Table 4 for Group 1 and Group 5,
whereas formulas referred to in Article 5 of this Decree shall be used for Groups 2, 3 and 4.
Table 4. Tariff items for calculation of the incentive prices for small hydropower plants
Group
1
5
TSINV
[c€/kWh]
8,34
6,1
TSRO
[c€/kWh]
2,1
0,70
TSGOR
[c€/kWh]
0,00
0,00
The incentive prices for the electricity generated in plants for high efficiency cogeneration referred to in
Article 6 of this Decree shall be calculated on the basis of the tariff items indicated in Table 6 for the
Group below 1 MWe of installed capacity and Group from 5 to 10 MWe of installed capacity, whereas the
formula referred to in Article 6 paragraph 1 of this Decree shall be used for the middle Group from 1 to 5
MWe.
Table 6. Tariff items for plants for high efficiency cogeneration
High efficiency cogeneration
TSINV
[c€/kWh]
Installed capacity below 1 MW
5.53
Installed capacity from 5 to 10 MWe 4.20
TSOIR
[c€/kWh]
2.83
2.15
*** THIS IS AN UNOFFICIAL TRANSLATION. ***
*** THE OFFICIAL COPY IS IN MONTENEGRIN. ***
TSGOV
[c€/kWh]
1.67
1.67