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Created before Nov 2016
Last update: 2016-10-18 22:49:33 BankTrack
Yann Louvel, Climate and Energy Campaign Coordinator, BankTrack
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Kosovo's power sector is made up of two power plants, Kosovo A and Kosovo B, located near the capital of Pristina. The government of Kosovo supports plans to reform Kosovo's energy sector which include the construction of a new 600 megawatt lignite-fired power plant, called the New Kosovo Plant. ContourGlobal, an American developer of electric power, is said to start construction in 2016. The cost of the project is estimated at USD1.6 billion, with a third to be financed by ContourGlobal and the remainder via loans. The plant is planned to go online in 2021.
With the aid of international organizations, primarily the World Bank, the government of Kosovo supports plans to reform Kosovo's energy sector which include: to close Kosovo A by 2017, rehabilitate Kosovo B to meet E.U. standards and develop a new 600 megawatt lignite-fired power plant, called the New Kosovo Plant. Plans also include privatizing the distribution system and assess the ability for alternative energy development in Kosovo. Not laid out in the strategy is another element: a new lignite strip mine. There are also plans to supplement this lignite-fueled energy sector with alternative energy, such as wind and solar, once the new power plant is constructed.
Plans to update Kosovo's power system began in the early 2000s and originally envisioned a 2,000 megawatt lignite plant that would allow the country to export energy to its neighbors. Political and investment setbacks caused the plant to be scaled back in size.
What must happen
By constructing yet another coal-fired power plant, the government would lock the citizens of Kosovo into decades of continued dirty energy and cost them upwards of EUR1.4 billion. This dirty and destructive coal plant should not go ahead and financial institutions should steer clear of funding it.
Kosovo faces the issue of energy on an everyday basis. The population is subject to constant power cuts, which take a toll not only on daily comfort, but pose a dangerous obstacle to the working of hospitals and business. Health problems arise from the serious pollution emitted from the two functioning power plants in the country; out-of-date models that emit 25 tonnes of dust and ash per hour, which is 74 times the EU standard for power plant emissions.
Residents in the municipality of Obilic are subject to the worst of the effects of the existing plants, which according to the Kosovo Agency for Environmental Protection, pollute the areas up to 30 kilometres away from their locations. Many experts regard this as a clear motive to build the New Kosovo Plant with better up-to-date filtration methods. That said, residents of Obilic and energy experts have criticized the government and are objecting to building the new plant on the grounds of environmental issues. In Obilic alone, 30 percent of the town suffers from chronic respiratory diseases from the pollution of the two existing power plants.
Kosovo A is seriously outdated, built in the 1960s, and the largest point source of air pollution in Europe. Kosovo B, built in the 1980s, is poorly maintained. It also fails to meet EU emissions regulations. The two plants have a combined installed capacity of 1,487 megawatt, but both are run far below installed capacity. Power outages are frequent as the result of years of underinvestment, neglect and wartime damage to the country's transmission and distribution systems.
Serious pollution is emitted from the two functioning power plants in the country, as they are out-of-date models that release 25 tonnes of dust and ash per hour, which is 74 times the EU standard for power plant emissions. Despite receiving billions of euros in funding from outside organizations, and despite significant budgetary support, the publicly owned Kosovar Energy Company (KEK) fails to provide consumers with a reliable energy supply and has operated for 12 years with losses.
While the plant is being depicted as necessary to ensure the country's energy security, up to 30 percent of available electricity in Kosovo today is wasted according to official data, because of lack of energy efficiency programmes. This adds to the 37 percent of electricity losses, of which around 17 percent are technical and a result of an old grid. The other are commercial losses, i.e. theft.
- Energy Strategy of the Republic of Kosovo for the Period 2009 - 2018, Published by Kosovo Assembly, 2008
- Law On Energy 2004/8
- Law On The Energy Regulator 2004/9
- Law On Environmental Strategic Assessment 03/L-015
- The Environmental Protection Law 2002/8
- Interim Strategy Note (ISN) for Republic of Kosovo for the Period FY10-FY11, by International Development Association and Itnernatonal Finance Corporation
- World Bank Group Energy Strategy Approach Paper, Sustainable Development Network, October 2009
- Treaty for the establishment of the Energy Community (EnCT) of South-East Europe
The propose new Kosovo power plant: an unnecessary burden at an unreasonable price
A report by IEEFA concludes that the World Bank, which has announced its support for a substantial financial subsidy for construction of the coal-fired plant, should invest instead in the development of renewable energy and energy efficiency in Kosovo. IEEFA concludes also that the U.S. government, which has endorsed the project, should cease its support for the misguided introduction of a costly and outdated form of electricity generation.
Sierra Club & Kosovar Civil Society react to Kosovo coal plant developments
"After months of waiting, we can now confirm what we already suspected: the Kosovar government and ContourGlobal are putting profits before the people of Kosovo," said Maura Cowley, Associate Director the Sierra Club's International Program. "An adequate assessment of the environmental and social consequences of this project has yet to finish, so there's no good reason for the government to push forward this dirty, dangerous project." (source www.sierraclub.org).
ContourGlobal could start building Kosovo power plant in 2016
According to Reuters: ContourGlobal could start building a coal-fired power plant in Kosovo in 18 months, in the first major investment in the country's energy sector in decades aimed at curbing power shortages and creating jobs, an official at the U.S. power company said. The cost of the project is estimated at up to EUR1.4 billion, with a third to be financed by ContourGlobal and the remainder via loans. The New York-based company was the only bidder for the 660 megawatt plant.
Energy sector reforms
The two main projects that aim to reform the energy sector in Kosovo are both active. These projects, funded by the World Bank, include:
1. The Clean Up Land Reclamation Project, which works towards cleaning up over 40 years of indisposed ash.
2. The Lignite Power Technical Assistance Project, funded by a World Bank grant of USD10.5 million and a European Commission grant of two million euro, is providing advisory services for the inclusion of private capital in a new lignite mine and the construction of a new power plant.
Plans for the construction of the New Kosovo Plant have been delayed and continue to be delayed for various reasons. There has been ongoing debate concerning what the size the new power plants should be and the phases in which it should be constructed. Furthermore, there has been protest by environmentalists and concerned NGOs within Kosovo and internationally, demanding that Kosovo's energy alternatives be fully evaluated before construction of a lignite dependent plant is underway. These protesting groups argue that sufficient research has not been done into Kosovo's potential for alternative energy, specifically into wind and solar technology.
The World Bank is now hesitating to support a coal-focused energy strategy for Kosovo in light of recent criticism from its involvement with South African utility Eskon building a 4,800 megawatt coal plant.
The World Bank Group is the main sponsor providing funding for energy sector reforms in Kosovo. Within the Interim Strategy Note (ISN) for Kosovo, released February 2010, World Bank Objectives for energy reform consisted of the five main points:
1. Phased closure of the five outdated and highly-polluting Kosovo A power generation units by the end of 2015.
2. Rehabilitation of Kosovo B to comply with EU environmental standards and privatization of that plant with support from USAID.
3. Development, through private participation, of the Sibovc SW lignite mine and a state-of-the-art power plant - the New Kosovo Power Plant (NKPP).
4. Privatization of KEK Distribution as a key element in the effort to improve its efficiency and gain better control over the rampant losses of electricity due to theft.
5. Development of the country's limited hydropower resources through PPPs.