Kosovo must do more for renewables, EU says

The European Commission (EC) has said that Kosovo should make more investments in the energy sector, and add further generation capacity from both thermal and renewable energy sources, in order to become able to plan the decommissioning of the country’s two coal power plants, which currently still cover almost all of its power demand.

In the report on Kosovo’s Economic Reform Programme for the period 2017-2019, published on the website of the Austrian Parliament, the EC said that the energy reforms recently implemented by the local government are not sufficient to improve the country’s troubled power market, which still relies heavily on coal and electricity imports.

Under its long-term energy strategy, which was approved last summer, Kosovo is expected to add 240 MW of power generation capacity from renewables, of which only 10 MW is for solar PV, while wind and biomass will account for 150 MW and 14 MW, respectively, with other renewable sources accounting for the remaining share.

Despite these plans, the local government is currently putting most of its efforts in the construction of the new coal power plant “Kosova e Re”, an investment that the EU itself considers necessary to replace the 40-year old Kosovo A Power Station (345 MW) near Pristina, and upgrade the 27-year old lignite-fired Kosovo B Power Station (540 MW) in Obilić. The future Kosovo Power Project (600 MW), which is being backed by the World Bank, includes the rehabilitation of the Kosovo B power plant, in order to bring it in compliance with EU standards.

According to the EC, Kosovo’s energy market suffers from the above-mentioned outdated production capacity, as well as low energy efficiency, a non-liberalized energy market and a tariff system that does not reflect real costs. The EC added that it is not clear if recent reforms of the energy market are aligned with the reforms included in the Energy Strategy. “Progress in 2016”, the EC stressed, “was mainly limited to legislative measures and the introduction of some energy efficiency measures.” The Commission also stressed that cost estimates of the new planned actions for 2016, which include the future coal power plant, three unspecified solar projects, 20 hydropower facilities and two wind power installations, “are very rough, and without a clear regulatory framework.” The EC also specified that all the work required by these actions was not done, except for the feasibility study for the rehabilitation of Kosovo B thermal power plant.

According to a report from Kosovo’s Ministry of Energy, solar had only a few hundred kW connected to the grid as of the end of 2015. The first solar PV projects with total installed capacity of 102.4 kilowatt were brought online in 2014. Under the FIT program run by the Ministry of Agriculture (MAFRD), 101 PV systems totaling 77 kW were installed in 2014, while further 135 installations with a combined capacity of 364 kW came online in 2015.

According to another report published by scientists of University of California, Berkeley on the scientific research journal IOPscience last year, at the end of 2015 the country had around 3 MW of solar eligible to receive support under the FIT scheme, which was issued in 2014. The program is granting a 12-year FIT of €85 ($92.5)/MWh.

“A striking aspect of Kosovo is its substantial solar energy resource, yet complete lack of development of solar power,” said the report’s authors. “It receives about 80% of Arizona’s solar insolation. That’s a higher level of sunlight than Germany, which has extensive solar energy facilities.” Kosovo, indeed, has a considerable solar potential with an average of 278 sunny days and 2000 hours of sun per year.

The authors of IOPscience’s report also believe that distributed renewable and solar can better help Kosovo manage the necessary growth of installed generation capacity compared to large centralized projects. While PV systems can be installed incrementally on a per kW or MW scale, a coal plant requires full commitment to hundreds of MW capacity during one investment period, the report explains. “As demand for electricity changes,” the US researchers said, “the deployment of distributed renewables provides investors with increased flexibility to extend capacity in smaller sizes as to not leave the investor with large-scale stranded assets.”

With 2 million inhabitants, Kosovo is still a disputed land between Republic of Serbia, which claims it as it’s own territory, and the Republic of Kosovo. Currently, 111 out of 193 member states of the United Nations have recognized Kosovo as an independent state.