Pljevlja I power plant, Montenegro
The existing 225 MW Pljevlja thermal power plant in the north of Montenegro, near the borders with Serbia and Bosnia-Herzegovina, has been operating since 1982. The plant was originally planned to comprise two units but the second one was never built. The plant, along with the extensive use of coal and wood for heating, has caused unbearably bad air quality in the town.
We closely follow international public finance and bring critical updates from the ground.
Even though the plant should have been brought into compliance with the Large Combustion Plants Directive by 2018, the government and the plant’s operator Elektroprivreda Crne Gore (EPCG) lost several years concentrating on the construction of the now-cancelled Pljevlja II, and did not pay sufficient attention to resolving Pljevlja I’s pollution issues.
Therefore, the ‘limited lifetime derogation’ option was chosen as a way to comply with the Directive, in which Pljevlja I would be able to operate for a total of 20,000 hours between 1 January 2018 and 31 December 2023. After that, it either has to close or to undergo a retrofit that would bring it into compliance with emission limit values for new plants, not existing ones.
In March 2018, Montenegro’s Environmental Protection Agency issued the Pljevlja I plant with an integrated environmental permit, which stipulated that it must comply with the 2017 EU LCP BREF standards by 2023 – the most recent best available technology applicable. As such, it is the first existing plant in the region which has been required to do so.
In June 2020 Montenegro’s previous government signed a contract with a consortium led by China’s Dongfang (DEC International) to retrofit the plant to bring it in line with the EU’s 2017 LCP BREF.
However, EPCG has never publicly proven that such an investment would be economically justified, nor that the planned investments would be technically capable of bringing the plant into compliance. At the time of signing, it was also claimed that this investment would extend the lifetime of the plant by 30 years, which seems highly unlikely. The plant is too old to operate for so long in its current state, but the planned works do not include reconstruction of the main parts of the plant, such as the boiler.
In the meantime, instead of spreading the available 20,000 hours evenly over the whole period from 2018 to 2023, the operator used them up as quickly as possible. The Pljevlja coal plant operated for 7,194 hours in 2020. Combined with the operating hours for 2018 and 2019, which amounted to 13,809 hours in total, this brings the plant well beyond the 20,000 hours allowed under its ‘limited lifetime derogation’.
In March 2021, when Montenegro had to report its operating data to the European Environment Agency under the Energy Community Treaty, the breach was confirmed, yet the plant has continued to operate. In April 2021, the Energy Community Secretariat opened an infringement procedure against Montenegro.
Additionally, in April 2021, the Ministry for Capital Investments asked the public prosecutor to investigate the tender process for the plant’s retrofit, as well as the fact that EPCG used up all its hours in three years instead of spreading them out until the modernisation project was ready to start. As of late 2021, it remains to be seen whether the modernisation will take place at all, but the government has made clear its stance that the plant should continue to operate.
In June 2021 Montenegro announced it will wean itself off coal by 2035, however, a public tender was actually opened in November 2021 for a feasibility study looking into connecting the existing plant to a new district heating system in Pljevlja, a project that EPCG has been promising the local community for 40 years, but whose construction would not even be finalised before the phase-out year.
In 2020 alone, as a result of the Pljevlja plant’s emissions, over EUR 1.3 billion were incurred in health costs by Montenegro and other countries. The estimated 625 deaths in 2020 make up almost 95 per cent of these costs, whilst the estimated 1,162 bronchitis cases in children due to PM10 amount to just over EUR 0.4 million.
Over 1 million restricted activity or lost work days are estimated, costing Montenegro’s and other countries’ economies EUR 51.3 million. In 2020, there were an estimated 12,257 days of asthma symptoms in asthmatic children, and a total of 436 cardiovascular and respiratory hospital admissions.