Capacity halved at Italy-Montenegro energy link

29 March 2018, Week 12, Issue 903

The capacity of a planned subsea power link between Italy and Montenegro has been halved to 600 MW, dashing the latter’s hopes of becoming a major energy hub for the region.

Luigi Ferraris, the CEO of Italy’s transmission system operator (TSO) Terna, revealed the decision when presenting the firm’s 2018-2022 strategic plan last week. He said it represented a compromise deal with Terna’s Montenegrin partners.

According to Ferraris, the 433-km cable under the Adriatic Sea has already been laid, and its receiving points in Tikat, Montenegro and Villanova, Italy have been built. Operations are slated to start up towards the end of next year.

The project was first mooted in 2007 as a means of linking the energy markets of Serbia, Bosnia and Montenegro with the EU power grid via the 400-kV Trans-Balkan Electricity Corridor, currently in development. Rome and Podgorica signed an agreement on its construction in 2010, estimating its cost at 800 million euros (US$992 million). Its launch was originally scheduled for 2015, but was repeatedly delayed. 

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Specifically, the interconnector aimed to pair Italy’s need for power imports with Montenegro’s potential to produce cheap hydroelectric and coal-fired energy. When the two countries agreed to build the cable, Enel, A2A and other Italian investors had plans for a number of energy generation projects in Montenegro, although many of these would later fall through. Montenegro remains a net importer of electricity.

Meanwhile, Terna has also focused on the development of alternative power links, including a 1.2-GW cable to Piedmont, Italy from Savoy, France, which is also due online before the end of 2019. The line will enable Italy to access more cheap flows of French nuclear energy.

Ferraris noted that Terna wanted to include the Montenegrin cable in Italy’s “Interconnector” mechanism – a state scheme introduced in 2009 to incentivise the private development of power links with other countries. According to the executive, its inclusion should be finalised in the coming months.

Terna has said it will spend 2.8 billion euros (US$2.5 billion) on grid development under its 2018-2022 strategic plan, adding 1,250 km of new cables. The company’s total capital expenditure during the period is earmarked at 5.3 billion euros (US$6.6 billion), 30% more than in its previous five-year plan.

Joseph Murphy

Edited by

Joseph Murphy

Editor

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