news 25 Jan 13

Investors Ignore Kosovo's Alternative Power Potential

International investors are showing increased interest in Kosovo’s energy sector - but some experts fear the focus on lignite sources could end up worsening the current high pollution levels.

Edona Peci

The European Bank for Reconstruction and Developments, EBRD, has expressed its willingness to invest in Kosovo's power sector, describing it as “a key priority” to the bank.

An EBRD delegation visited Kosovo last week to assess increasing the country’s power generation capacity, mainly by financing a new plant, the New Kosovo Power Plant.

While investors' interest in energy in Kosovo is seen as welcome, the apparent focus on fossil fuel is causing alarm in some circles, owing to the country's high pollution levels.

Nezir Sinani, from the Kosovo Civil Society Consortium for Sustainable Development, KOSID, says the bank's interest in investing in lignite “is not a good sign” for hopes of increased investment in currently neglected alternative energy.

“There are a lot of renewable energy sources in Kosovo, and they have to be used more than they are now," he said.

"Only 3  per cent of Kosovo’s current energy mosaic is made up of renewable sources,” he told Balkan Insight.

Sinani stressed the need for Kosovo to start generating more of its energy from hydro resources, from wind, solar power, and from biomass and geothermal energy, so that the current “degradation of the environment can stop”.

Whether this will happen remains unclear, however.

Approximately 98 per cent of the power generated within Kosovo today comes from two lignite coal-fired thermal power plants, called Kosovo A and Kosovo B, which have a net operating capacity of between 840 and 900 MW. By contrast, Germany obtains less than a quarter of its energy from lignite.

A recent World Bank study, meanwhile, noted that exploiting lignite, also known as "brown coal", is “the least expensive thermal option, even when the relatively higher environmental costs are priced in”.

But, Sinani maintains that investment in alternative energy will cost less in the long term, while also creating new job opportunities.

Kosovo’s Energy Strategy for 2009-2018 estimates domestic lignite reserves at a total of 12.5 billion tons, of which most, 10.9 billion tons, are exploitable.

The country's power system has a total installed electricity generation capacity of nearly 1,524 MW, with about 920 MW as net operating capacity.

Environmental issues are a key priority for Kosovo as it tries to harmonise its legislation and standards to those of the EU.

But neglect of the development of alternative energy sources is not the only issue facing the power sector in the country.

Ethem Ceku, a former energy minister of Kosovo, has accused the government of lazy thinking generally when it comes to energy planning, and of potentially allowing foreign investors to obtain a virtual monopoly.

“Kosovo’s government has to play more of a role in regulation of prices and take action in the market to impact on the price”, he added.

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