Kosovo and coal

With funding from the World Bank, Kosovo is currently embarking on a power sector strategy that involves building a new lignite mine and an associated massive generating plant. In addition, the plan calls for closing five outdated generating units by 2015 (all at the Kosova A power station), cleaning up poorly managed coal ash dumps produced by those units, and building a new lignite mine and associated generating plant.

It has been reported that Kosovo has one of the world's largest proven reserves of lignite coal in the world, with more than 15 billion tons of lignite, worth 300 billion dollars in the 2010 market.

Coal and power companies
Kosovo Energy Corporation (KEK) is the sole power corporation in the Republic of Kosovo. KEK is vertically integrated and was legally incorporated in 2005. KEK was part of the Yugoslavian power system, and focused in production of energy from coal, with power supplied from plants outside of Kosovo. By the late 1990s, the core business of the Corporation became the production of coal and energy in Kosovo, through two open-cast coal mines - the Mirash mine and Bardh mine - and two power plants, PP “Kosova A” and PP "Kosova B power station”, which cover the territory of Kosovo. There are approximately 400,000 customers and 8,000 employees in different sectors.

A 2010 European Union report stated that the "legal unbundling of the distribution and supply functions of the Kosovo Energy Corporation (KEK) is due at the end of 2010 with a view to privatisation. Until completion of the new Kosovo power plant project, the other functions will remain integrated in KEK."

The production capacity of Kosova A power station and Kosova B power station has been hampered by chronic technical problems, including a lightning strike in July 2002. Kosovo has been importing electricity in order to make up some for its deficit. Despite the imports for much of the 1999-2002 electricity was not guaranteed 24 hours a day.

Coal Reserves
Kosovo has an estimated 14,700 metric tons of lignite coal, the world's fifth-largest proven reserves of lignite. Often referred to as "brown coal," lignite is considered the dirtiest of all fossil fuels.

Sibovc Coal Mine
Sibovc coal mine is located in Obilić, near Pristina.

Mirash and Bardh Coal Mines
The Mirash and Bardh open-cast coal mines are lignite coal mines in Kosovo operated by the Kosovo Energy Corporation (KEK).

Kosova A power station
This plant was built in the early 1960s, and is located several miles northwest of Kosovo's capital city Pristina. It is operated by Kosovo Energy Corporation (KEK). It comprises five units and uses coal from the Mirash coal mine.

Kosova B power station
Kosovo B power station was built in the early 1980s and is situated a few kilometers from Prishtina/Pristina. After conflict in Kosovo in the 1990s, the European Agency for Reconstruction (EAR) invited tenders for the rehabilitation of Kosovo power station unit B2. In June 2000, the contract was won by a consortium of RWE Power International.

Plant closures
The Energy Strategy of Kosovo aims for the closure of five outdated generating units by 2015 (the Kosova A plant) by the end of 2015, since the units cannot economically be brought into compliance with the European Union Large Combustion Plant Directive. They would need to be closed by 2017 at the latest, as required under the Energy Community Treaty. In closing the units, Kosovo is being supported by the European Commission in preparing the decommissioning of "Kosovo A" in favor of a new lignite coal plant.

Proposal for the New Kosovo power plant
Plans to update Kosovo's power system began in the early 2000s and originally envisioned a 2,000-MW lignite plant that would allow the country to export energy to its neighbors. Political and investment setbacks caused the plant to be scaled back in size.

A 2010 EU report stated that plans for the development of a new Kosovo power plant (using lignite coal) had been reconfigured: "The initial installed capacity will be two units of 200-300 MW, the Sibovc lignite field will be developed immediately and participation in the Kosovo B power plant will be included in the package to be offered to investors with a view to refurbishment. The legal unbundling of the distribution and supply functions of the Kosovo Energy Corporation (KEK) is due at the end of 2010 with a view to privatisation. Until completion of the new Kosovo power plant project, the other functions will remain integrated in KEK."

A five-part U.S. State Department strategy for Kosovo obtained by ClimateWire suggested closing Kosovo A, rehabilitating Kosovo B to meet E.U. standards, developing a new 600-MW lignite-fired power plant, and privatizing the country's electricity distribution system.

Role of World Bank
The World Bank is considering supporting the Lignite Power Technical Assistance Project with a World Bank grant of US$10.5 million and a European Commission grant of Euros 2 million, as well as providing "advisory services" for the inclusion of private capital in the new lignite mine and power plant.

In a July 2011 statement to ClimateWire, a World Bank spokesman said the institution had not taken a decision on financing Kosovo B, and that an independent panel of experts was being tasked to determine if the project meets the bank's coal guidelines. The World Bank asked for and received written support from the Obama Administration for the World Bank to approve the loan for the new coal plant and privatize the country's electricity distribution system.

In January 2012 a World Bank analysis concluded that building a lignite coal plant in Kosovo could cost nearly twice as much money as previously estimated.

The study also acknowledged about 400 megawatts of hydro, wind and other clean energy capacity in Kosovo -- something the World Bank had previously dismissed as virtually non-existent. Yet despite newly recognized financial challenges to coal and the existence of cleaner alternatives, the World Bank ultimately concluded that a new 600 MW coal power station remained the "best and cheapest option" for replacing Kosovo's long-neglected power plants and establishing reliable power supply in the country.

The US has continued to support $58 million in World Bank financing for the plant despite President Obama's 2013 pledge to stop funding for overseas coal, according to a 2013 U.S. Agency for International Development report. The report argues that coal is the only short-term option for Europe's poorest, energy-starved country, making the plant still eligible for U.S. backing under Obama's Climate Action Plan.

Citizen opposition
Environmental groups have urged the World Bank to allow Dan Kammen, the bank's chief technical specialist for renewable energy, to do a special assessment of Kosovo's options. Kammen did an assessment in Malaysia, which then canceled a proposed coal-fired power plant in favor of alternative energy options. There is a standoff among members of the World Bank's board of directors over a proposal to eliminate coal financing for all middle-income countries. The Obama administration and World Bank officials argue that under the proposed energy strategy, coal lending is permitted for the poorest countries, and Kosovo fits into that category. Environmentalists argue that while the coal plant might meet the letter of the energy strategy, it does not meet the spirit of it, which is to develop cleaner energy sources for developing nations.

Following a World Bank report released in January 2012 that supported the construction the the proposed coal-fired power plant in Kosovo, environmental groups maintained that entrenched support for the coal project within the US State Department had obscured thinking about new, cleaner possibilities. The Sierra Club and others argued that the World Bank's analysis showed no near-term need for additional baseload capacity and noted that analysts had not actually calculated all of the costs involved in the plant or addressed Kosovo's needs for peaking power.

Estimated cost of electricity
The Sierra Club analyzed the “Terms of Reference” provided to the Kosovo Strategic Framework for Development and Climate Change Expert Panel on whether the proposed plant meets World Bank policy and determined that it does not, as "the cost of electricity that would be provided by the Kosovo plant is grossly underestimated" because "the predicted cost of electricity is based on the assumption that all four surviving Kosovo units will operate 85 per cent of the time" yet "overall demand would [likely] be 20 percent, not 85 percent, thus tripling the cost of generation for this plant." The report concluded that the plant will likely cost 2-3 times what project proponents claim, and that the country does not have enough base load demand to justify such a large power project.

The World Bank countered in a report stating that the coal plant will cost twice as much as first estimated, but still advocated its construction.

Europe and coal

 * Austria and coal
 * Belgium and coal
 * Bulgaria and coal
 * France and coal
 * Germany and coal
 * Greece and coal
 * Hungary and coal
 * Italy and coal
 * Netherlands and coal
 * Norway and coal
 * Poland and coal
 * United Kingdom and coal
 * World Bank and coal

External Resources

 * The Kingdom of Coal: Documentary, BIRN and Crossing Bridges (2011)
 * "Background Paper: Development and Evaluation of Power Supply Options for Kosovo," prepared by DHInfrastructure for the World Bank, December 2011

Background information

 * European Environment Agency, European Pollutant Emission Register. (This has a list of power stations and their current emissions).