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Politics

Energy in Kosovo, a Decade of Opportunities and Failures

 

weiwei

by Asim Shabanhaxhaj

It’s not news that Kosovo has an energy problem. The situation has been the same for more than a decade and there is no end in sight. The latest episode of consumers’ bills more than doubling from one month to another has brought frustrations dating from 1999 to the surface.

A typical household in Kosovo spends a significant amount of their income on their electricity bills. A large number of consumers, including all of the Serb populated areas of northern Kosovo, do not pay for their electricity use at all. As a result, the consumers that do pay subsidize the non-paying ones, raising consumer rights issues.

Besides leaving households in the dark and in the cold during cold winter months, a lack of a steady electrical supply significantly hampers the economic activity of businesses operating in Kosovo. The estimate is that these outages result in losses equivalent to 17% of their annual sales [1). As one might suspect, this not only reduces the capacity of current businesses operating in Kosovo, but it is also an important factor when foreign investors consider Kosovo as an investment destination. That negative impact is much harder to quantify, but is likely to be substantial.

Kosovo’s government does not seem to be in a hurry to find a solution though. The World Bank estimates that the demand for energy will more than double in Kosovo by 2025 to around 2500 Megawatts. The capacity of current operating thermal plants Kosova A and Kosova B is around 920 Megawatts. Moreover, Kosova A is desinted to be decommissioned by 2017, leaving a significant difference between existing capacity and forecasted growth in demand. There are a variety of proposals on the table when addressing this difference. One involves relying on Kosovo’s significant lignite coal reserves and building a new thermal power plant (“Kosova e Re,” or “New Kosovo”) to meet current and future demands. The government, with the support of the World Bank, initially opened the bidding for a privately built 2000 Megawatt capacity thermal plant. That was six years ago. Much has happened since, except for a plant being built. The plan has been significantly reduced to a much smaller sized, 600 Megawatt plant. These changes have added uncertainty to the process and have made bidding companies question the government’s seriousness and commitment to the project. Some bidders completely withdrew.

The environmentalists prefer a different approach. While they do realize that a thermal plant should be part of the equation, they claim more emphasis should be placed on renewable resources such as wind, hydro and solar. A study conducted by the Renewable & Appropriate Energy Laboratory Energy & Resources Group at the University of California in Berkeley claims that through renewable resources Kosovo can meet 38% of its energy demands while creating 30% more jobs than if it were to primarily base its energy strategy on lignite coal reserves. Considering the high unemployment rate in Kosovo, a strategy that places emphasis on job creation while meeting the energy demands of the Kosovo market, deserves serious consideration. Another factor the paper cites is the external costs of using coal to generate electricity. If only explicit costs are considered then coal generated electricity is the most cost efficient alternative. However, when external costs such as population health, air and water pollution, and climate change are considered, then other alternatives are much more attractive.

Kosovo needs a smart approach to solving this pressing problem. The scope needs to be broadened to include job creation and economic development. The government needs to present a clear strategy for the path forward. It needs to consider all of the factors and the stakeholders and propose the best possible strategy towards meeting Kosovo’s energy needs. Kosovo does have coal reserves to power it for the next forty years. Kosovo also has the town of Mitrovica, where the population has the world’s highest levels of lead in their blood.

References:

Kammen, Daniel M., Mozfari, Maryam, and Prull, Daniel. “Sustainable Energy Options for Kosovo; An analysis of resource availability and cost.” University of California, Berkeley, 15 Jan. 2012

World Bank, “Development and Evaluation of Power Supply Options for Kosovo”, Sep. 2011

The article was originally written in English.
Photo credits: Ai WeiWei (Gas Mask Images series)
The views, opinions and comments published in this BLOG are not necessarily those of the Kosovo 2.0 editorial staff. Also, the website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted on the blog stories. All comments that incite and encourage hate speech or discrimination will be moderated.

 Kosovo 2.0
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Discussion

One thought on “Energy in Kosovo, a Decade of Opportunities and Failures

  1. Reblogged this on SMIPP Ltd..

    Posted by smipp Ltd. | March 1, 2013, 3:35 pm

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