New Government in Kosovo pivots country away from coal

Kosovo, one of the most heavily polluted countries in Europe, looks set to begin pivoting away from its reliance on coal-fired power stations. Earlier this week, UK-based power generation company Contour Global cancelled the construction of a 500 MW coal-fired power plant near the capital, Pristina. 

In notes that accompany's Contour's annual report, the company cited the "political situation" in the country as the reason for the cancellation. This was a reference to the newly elected government headed up Albin Kurti of the Vetëvendosje (Self-Determination) party. Kurti has publicly condemned the plans to build the coal plant, known as Kosovo e Re (New Kosovo).

“The recent formation of a government led by a prime minister publicly opposed to the project and the government’s inaction have made it impossible for the project to meet the required milestones by its completion date,” said Contour Global in a statement.

“As we have stated in the past, Kosovo was to have been our last coal development project. We will not develop or acquire coal power plants in the future and, with only one majority-controlled coal project in our 107 power plant portfolio, we are increasingly reducing our carbon emission intensity,” the statement continued.

As a country, Kosovo is highly reliant on the burning of coal for most of its energy needs. The previous government, led by Ramush Haradinaj, said it would push ahead with Kosovo e Re despite having support for the project withdrawn by the World Bank, which favours renewable energy projects, in October 2018.

The idea for Kosovo e Re was first mooted in 2005 as a replacement for the country's older coal plants, which have been in operation since 1962 and 1983 respectively. The two plants have long been criticised for their significant contribution to the high levels of air pollution in the country.

Pippa Gallop, a research coordinator at CEE Bankwatch, a network of environmental NGOs across central and eastern Europe, said that the cancellation of Kosovo e Re is great news for the country. She said that as well as freeing up resources to concentrate on much-needed energy efficiency, solar and wind projects, it will also save a tremendous amount of money.

“Kosovo’s previous government never came clean about exactly how much it would cost households and the state budget to fulfill the terms of the power purchase agreement signed with Contour Global,” she said. “But with a ‘target’ wholesale electricity price of €80/MWh and a host of other guarantees provided to the company with regard to coal quality, land transfer and other costs paid by the state, it was clear that the project would cost Kosovo dearly.”

“For years it looked like there was no rule that the Kosovo government was not willing to break for the sake of pushing the project forward. From a tender process that breached Kosovo legislation, to an environmental impact assessment without any public consultation, to the utterly illegal power purchase agreement, the legal violations kept piling up,” Gallop added.

Kosovo, whose new government had been expected to cancel the project itself, must now decide on its energy future. The World Bank has described the country's present electricity supply system as outdated, undependable and inadequate, and that it poses large challenges to economic growth and development.

Power outages are relatively frequent, hindering investment and causing disruption to manufacturing, health services and educational facilities. 

Many Kosovan citizens still burn firewood for cooking and heating, which creates air pollution, which in turn causes respiratory and other health problems.

The lack of a dependable, affordable and reliable energy supply means that foreign and domestic companies are reluctant to invest in the country and create jobs there.

“The country has wasted years on pursuing coal projects that could have instead been spent addressing such losses and investing in sustainable forms of renewable energy, that are now more economically viable than coal,” concluded Gallop. “There is no more time to lose on coal. It is no longer a resource, but a liability. It’s time for Kosovo to face the future and turn to clean, efficient energy.”

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