
On the outskirts of Kosovo''s capital Pristina, two ageing coal-fired power plants supply electricity to much of the country. The clouds of smoke they constantly emit are clearly visible from roads out of town and from higher ground within the city.
Kosova A and B, only around 5km from central Pristina in the town of Obiliq, are two of the most polluting power plants in Europe. Built in the Yugoslav era – the first unit of Kosova A was put into operation back in 1962 and Kosova B opened in 1983 – they still supply around 90% of Kosovo''s electricity.
Now, however, there are plans to change that. One of the Southeast Europe region''s largest wind power plants is already in operation at Bajgora in the mountains of northern Kosovo, and in 2023 the government adopted an ambitious energy strategy to shift Kosovo towards renewables.
It is located about 40 kilometres north of the capital Pristina in the southern foothills of the Kopaonik mountains. Developed by a joint Kosovo, German and Israel venture, Sowi Kosovo, it received funding from the European Bank for Reconstruction and Development (EBRD), Erste Bank Austria and Slovenian bank NLB.
"It was in the end the biggest renewable energy project in Kosovo at 105 MW. One of the highlights of this project for me is that it was a JV from a German company with partners from Israel and Kosovo," head of Potsdam-based Notus Europe Rico Koch says in an interview with bne IntelliNews in Pristina.
"It was an important project for Kosovo because as a country we are an energy importer, and we are faced with a lack of electricity especially during the winter season," says Guri Shkodra, Notus'' country manager for Kosovo.
"It continues to be one of those landmarks, the starting point of a long process of decarbonisaton the country has to go through which includes the energy transition as well."
Asked how difficult it was to carry out the project, Rico says it was helpful that the authorities were behind it – even with multiple changes of government during the planning and construction periods.
Technically, the project was complicated by the fact the site is up in the mountains, and the turbines were imported via the port in Durres in neighbouring Albania. However, as Koch points out, Notus has existing projects in the mountains of Austria, France and South America, so the firm had experience in working in a mountainous environment.
Opening the plant was an important step, and there are plans for further investments in both wind and solar. Despite being extremely rich in lignite, Kosovo aims to switch to renewable energy and eventually achieve a full decarbonisation of its energy sector.
At the same time, Kosovo faces a growing need for energy, as its economy is among the faster-growing in the region, with export-oriented manufacturing an important part of its growth.
This won''t be easy given that coal has long been the logical choice in Kosovo given the country''s immense resources; the small country has 12.5bn tonnes in proven reserves of lignite, which officials say is the fifth largest of any country worldwide.
However, there is growing awareness of the health and environmental problems caused by burning coal to generate electricity, by far the largest source of greenhouse gas (GHG) emissions in Kosovo.
"Kosovo''s carbon intensity, as measured by CO2 emissions per unit of output, is the highest in the Western Balkans and about four times the average of the EU," points out a 2023 International Monetary Fund (IMF) report. It adds: "The burning of fossil fuel for heating is the main cause for the high concentration of harmful PM2.5, one of the leading causes of illness and death associated with respiratory, pulmonary and heart diseases."
On top of the pollution from the two ageing power plants, they are highly unreliable, resulting in frequent unplanned outages. This became particularly problematic during the recent hike in energy prices sparked initially by revival of industry after the pandemic and intensified by Russia''s invasion of Ukraine and related sanctions. The crisis fell particularly hard on Kosovo.
"Kosovo is a very small economy and we rely largely on imports. This means that if a major shock happens in large economies then we have some imported in inflation in the country; if there is a major disruption in the supply chain it also affects us as small economy," says Blendi Hasaj, executive director of think-tank Institut GAP, in an interview with bne IntelliNews.
"With respect to the most recent crisis in the energy sector, even though Kosovo looks like it has sufficient production of energy, this is based on coal and they [the power stations] are not operating at full scale. They were built decades ago, and go out of the system many times," Hasaj adds.
"Unreliable domestic supply makes the system vulnerable to short-term price fluctuations. Frequent unplanned outages of Kosovo''s old coal-based plants have been a main reason preventing the sector to engage in long-term electricity supply contracts, rendering the system dependent on the volatile day-ahead and intraday markets," confirms the IMF report, "Kosovo''s Electricity Sector Challenges and Opportunities".
On a more positive note, the government in Pristina was commended by international financial institutions (IFIs) such as the IMF and World Bank for taking targeted and short-term measures to alleviate the financial burden on consumers.
In March 2023, the government unveiled the energy strategy for the next eight years. The key target set in the strategy was to increase the share of electricity derived from renewable resources to 35% by 2031, from 6.3% at the time.
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