Coal or renewables?

Rilind Latifi, a Kosovar master’s student at SAIS, writes:

Since the end of the war in 1999, Kosovo has faced critical electricity shortages that have hampered economic growth. Frequent power outages disrupt manufacturing, education and health services. Despite immense investments by donors, the existing inefficient coal power plants are unable to meet electricity demand. The Government of Kosovo (GoK) is cognizant that reliable energy supply is essential for economic development and is seeking to address the issue.

Two coal-fired power plants generate 98% of the electricity in Kosovo . Lignite (brown coal) is abundant; Kosovo has the fifth largest proven reserves in the world. However, lignite has lower energy density and higher CO₂ emissions than black coal.

The GoK has planned the construction of a new, 600 MW lignite power plant to meet domestic demand and compensate for the expected closure in 2017 of Kosova A, one of the dirtiest coal plants still in operation in Europe. Following an options study that concluded the lignite plant was the lowest-cost option, the World Bank will give a partial risk guarantee to private investors bidding for construction of the new plant.  The new coal plant would alleviate the energy crisis and support economic growth.  But doing so would likely exceed domestic demand and saturate the energy market, eliminating the need to invest in renewable sources. Installation of a carbon capture and storage (CCS) system would require additional generation, which could translate into higher electricity prices.

This new coal plant will also adversely affect EU accession prospects, as Kosovo has obligated itself to the EU’s 20-20-20 energy and climate mandate:

• a 20% reduction in EU greenhouse gas emissions from 1990 levels;
• raising the share of EU energy consumption produced from renewable resources to 20%;
• a 20% improvement in the EU’s energy efficiency.

The project pits the World Bank against the EU mandate.

The Kosovo Civil Society Consortium for Sustainable Development (KOSID) has recently launched a campaign opposing the new coal plant and calling for alternative approaches to tackle the energy crisis. The campaign cites the World Bank’s own statistics on the health and financial impact of air pollution in Kosovo. KOSID has prepared a series of ads airing on national TV that call for development of renewable energy sources. The campaign is aimed at conveying to the public a sense of urgency and the need for action. The proposed coal plant has also attracted international attention due to the World Bank’s role (see Bank Information Center; Sierra Club, Huffington Post).

What alternatives are there?  Technical losses of energy remain a persistent issue in Kosovo due to the old and inefficient distribution system. Commercial losses such as meter tampering, non-payment of bills and electricity theft through illegal connections to distribution networks exacerbate the problem. Combined technical and commercial losses are estimated to be around 40% of the total generation, pointing to an urgent need for updating the electric grid.  The government recently approved the privatization of the Electricity Distribution Company to a Turkish consortium.  It is not clear whether this will lead to improved efficiency.

Considering that over half of the electricity in Kosovo is used for residential heating, investments in energy efficiency are crucial to lowering demand. Retrofitting and weatherization of buildings would contribute to lower energy use for heating and cooling. Additionally, improvements in industrial energy efficiency can also help cut back growing electricity demand.  Wind, solar, and hydropower are all intermittent and cannot guarantee generation at peak demand. They can serve as secondary sources, but cannot replace coal completely.

The choice is stark.  The GoK and the World Bank point to the available and inexpensive lignite and forecasts of increasing demand. They claim that Kosovo will face a shortage of at least 500 MW once the old coal plant Kosova A is closed.  KOSID insists that Kosovo can meet its energy needs through the elimination of losses, increased energy efficiency and renewable sources with no additional coal use, citing a University of California Berkeley study according to which Kosovo can reach total clean energy production of up to 780 MW.

There is no easy solution.  The Government of Kosovo should fully engage stakeholders, including civil society, in reaching an acceptable solution.  Balance is needed among sound resource use, economic growth, and environmental and health concerns.  This is a tough decision.