| Photo: Kosovo Ministry of Economic Development

Energy prices likely to rise with Kosovo’s new coal plant

The maximum price per megawatt produced by the Kosova e Re power plant will be set at 80 euros, which would be 52 euros higher than the current cost of electricity.

Kosova e Re, a World Bank-funded project to construct a new power plant to replace the 50-year-old “Kosovo A” plant and rehabilitate “Kosovo B,” has drawn fierce criticism from health organizations and local residents.

Kosovo’s Minister for of Economic Development Blerand Stavileci said that the plant is set to finish construction and begin functioning in 2021.

At a public discussion in Prishtina on Wednesday, Stavileci announced that the maximum price per megawatt produced by the new coal plant will be set at 80 euros, “and it will be respected.”

According to a report by Kosovo’s Energy Regulatory Office, ERO, on the tariff setting for 2016, the 2016 cost of electricity produced by the Kosovo Energy Corporation, KEK, was 28.15 euro/megawatt hour, Mwh.

Stavileci said the price of the imported energy in 2016 was up to five times more expensive than the price of the energy that will be produced by the new plant.

According to him, the price of electricity produced by the new coal plant will cause a 28 per cent raise on current tariffs, but the higher national prices will still be lower than what he projects to be higher import prices

“…In any condition, meaning even in peak conditions when the demand for consumption is at its highest, we have guaranteed a price that is five times lower than these values [of energy import],” Stavileci said.

However, according to documents produced by the ERO, the average price of energy imported in 2016 was up to 51.8 euros per megawatt hour, almost 30 euros less than the new price ceiling. This price is permissible and is usually adjusted at the end of the year based on the price that is realized.

Based on ERO’s reports, import costs in 2015 were similar, with an average price of 51.76 per Mwh.

Stavileci said that it will be four years before the planned Kosovo e Re plant will start producing energy.

“This is a very complicated project. This year we will finish the financial and tendering deals and the plant will start being built next year,” Stavileci said.

He said that the World Bank and other donors will visit the building site next week.

Stavileci claimed that up to 10,000 people are expected to be employed during the three to four years of the plant’s construction.

He added that the main criterion remains the regular supply of electricity with a reasonable price, and that energy independence is an issue of sovereignty.

“Our sovereignty will be sealed when we become independent energy-wise,” Stavileci said.

The minister did not give a concrete answer regarding the fate of the “Kosova A” plant or disclose the date that it could be decommissioned.

In 2015, a group of civil society organizations in Kosovo warned that the building of Kosova e Re will increase electricity prices by 30 per cent.

In February, Kosovo Civil Society Consortium for Sustainable Development, KOSID, said that they sent a file detailing problems with the new power plant to the State Prosecution and EULEX. The coalition says the brief included information about alleged violations committed by the government of Kosovo since the initiation of the tender for the building of the coal plant.

For over a decade, residents living near the planned site of Kosova e Re have been struggling with expropriation. An internal review by the World Bank found that the global lender failed to uphold even its own own standards when it came to resettling the community jointly with the Ministry of Environment and Spatial Planning.

Stavileci said that they created a fund of ten million euros to support the areas where Kosova e Re will operate, and added that the local residents will be benefit from additional employment opportunities and community development.

“We will establish a fund for community development from which the local residents will benefit. A certain percentage, up to 20 per cent, will go to the residents of the areas where the project will be developed. This is regulated by one of the articles in the law. The sum will be 10 million euros for seven years, which much larger than the one that the municipality of Obiliq has,” he said.

24/03/2017 - 11:42

24 March 2017 - 11:42

Prishtina Insight is a digital and print magazine published by BIRN Kosovo, an independent, non-governmental organisation. To find out more about the organization please visit the official website. Copyright © 2016 BIRN Kosovo.