Kosovo - Energy

Energy

Last published date: 2022-08-05

Overview

Kosovo is currently unable to generate enough electricity domestically to fully meet demand for energy. Electricity consumption and peak demand in Kosovo grew more than 90 percent between 2000 and 2010, stabilized from 2011 to 2018, but increased by another 20 percent from 2018 to 2021. There is a vital need for stable, base-load power generation in Kosovo that can meet demand. Power shortages and outages have grown less frequent but can still occur when generation and import capacity do not meet demand or when there is a service failure at one of Kosovo’s outdated power plants. The surge in energy prices in Europe in late 2021 and 2022 has increased the urgency to invest in sustainable domestic energy generation and reduce dependence on expensive imports.

The vast majority of electricity in Kosovo is produced by two Yugoslav-era lignite-fired thermal power plants, known as Kosovo A and Kosovo B. The two thermal power plants are currently capable of producing up to 880 MW. Hydropower plants (HPP), including small river-based plants and the Ujmani/Gazivode lake facility, produce an additional 132 MW, but can have negative environmental effects on surrounding ecosystems and are highly controversial. Other renewable energy sources (RES) are a growing source of domestic supply, currently contributing another 147 MW. To encourage RES, Kosovo has established the necessary legal framework and has offered a feed-in tariff for hydropower, wind, photovoltaic, and biomass generation, but will be switching to an auction mechanism for further renewables development. The Government of Kosovo is currently finalizing a long-awaited energy strategy where it is expected to announce the eventual decommissioning of one of the coal-fired power plants, set a renewable energy target for 35 percent of all electric energy consumption by 2031, and further integrate in regional energy markets. The energy strategy will also include construction of 390 MWhs of battery storage capacity - funded through a grant from the Millennium Challenge Corporation - to facilitate renewable energy and improve electrical stability.

As a member of the Energy Community, Kosovo committed to meet mandatory RES targets for 2020, which were defined and approved by the Energy Community Ministerial Council in 2012. The mandatory commitment is to reach 25 percent of final gross energy consumption. Kosovo met the mandatory target of 25 percent on time, though their success is largely driven by wintertime wood burning which they count as renewable biomass. The Turkish company Guris has developed a 32 MW wind farm using General Electric turbines. AnIsraeli investment for a larger 103 MW wind farm also using General Electric turbines, came online in late 2021. Kosovo currently has 10 MW of installed solar capacity under the Feed-in-Tariff (FiT) scheme and another 10 MW of rooftop solar panels on their facilities under prosumer or behind-the-meter status. As of 2021, Kosovo has 279 MW of RES power generation capacity installed.

Table: Total Market Size
	2018	2019	2020	2021
Total Local Production	5,311GWh	5,718GWh	6,301GWh	6,207GWh
Total Exports	677 GWh	905 GWh	1,283 GWh	835 GWh
Total Imports	825 GWh	928 GWh	839 GWh	1,311 GWh
Imports from the US	0 GWh	0 GWh	0 GWh	0 GWh
Total Market Size	5,163 GWh	5,694 GWh	6,745 GWh	5,730 GWh

Unit: Gigawatt hour (GWh)

Total market size = (total local production + imports) - exports

Data Source: ERO measured and estimated data

Kosovo’s energy use is driven by households, and much of that energy use is for wintertime heating. Kosovo’s housing stock is largely inefficient and uninsulated. Energy-efficiency improvements will become increasingly attractive for consumers as gaps in energy bill collection are resolved and full-cost energy tariffs are established, though progress toward full liberalization of the electricity market continues slowly. The Millennium Challenge Corporation (MCC) and several donors are implementing programs in energy efficiency and district heating energy expansion.

Greece and North Macedonia are preparing for construction of a gas pipeline connecting northern Greece with North Macedonia, and the Western Balkan Investment Fund has commissioned a study that looks at the possibility of extending the project across the North Macedonia-Kosovo border. The Government of Kosovo has expressed deep reservations about the pipeline project but remains open to the idea. In addition to the gas pipeline, Kosovo remains interested in potentially contracting electric energy produced from gas-fired power plants in neighboring countries, including Albania and North Macedonia.