Kosovo opts for coal plant despite criticism

ENKA Insaat ve Sanayi AS

02/11/2018 11:26

By Fatos Bytyci
    PRISTINA, Nov 2 (Reuters) - After decades of relying on
lignite, Kosovo has been told it needs to phase the energy
source out, despite having 14 billion tonnes of reserves, the
fifth largest in the world.
    Last month, the World Bank told Kosovo it would no longer
support a planned 500-megawatt (MW) coal-fired power plant. It
was supposed to provide a partial risk guarantee to help unlock
cheaper loans for its biggest energy project.  L8N1WQ5XG 
    "The World Bank has recommended to us to have a 400 MW solar
park, a 170 MW wind park and a 350 MW battery storage park,"
Valdrin Lluka, Kosovo's Minister for Economic Development, said.
    "We don't have that luxury to do such experiments in a poor
country such as Kosovo. It is a major risk. It is in our
national security interest to secure base energy inside our
territory," he told Reuters.
    Other Balkan countries rely on coal to produce power, with
Serbia and Bosnia generating 70 percent and 60 percent
respectively in ailing coal-fired plants, and both are in the
process of adding new coal capacities.      
    London-listed power generator ContourGlobal  GLO.L , which
won the tender to build Kosovo's new plant and operate it for
two decades, is now trying to secure funds elsewhere. L8N1WR467 
    The government committed to buying the total output of the
plant at a price yet to be determined.
    The two old power plants Kosova A and Kosova B are among
Europe's worst polluters. The government said the new plant, to
replace Kosova A, would burn 40 percent less coal and release 20
times less emissions.
    But power prices in Kosovo, among the cheapest in Europe,
would rise 25-35 percent once the plant goes online, mostly due
to investment for environmental protection, Lluka said. 
    By the end of 2018 the best bidder to build the generators
at the plant will be picked from China Machinery Engineering
Corp.  1829.HK , a consortium of ENKA  ENKAI.IS , Mitsubishi
Hitachi Power Systems and Tecnicas Reunidas  TRE.MC , a General
Electric-led consortium  GE.N  and Hyundai.    
    As the lignite debate continues, local brewer Peja Beer
invested 5 million euros into Kosovo's first solar park. In a
sunny day in late October, the 6 MW park outside the western
town of Gjakova was producing 3.6 megawatt hours of electricity.
    The feed-in tariff for 1 MWh of solar power amounts to 136
euros while 1 MWh from coal-fired plants is sold for 30 euros.
    "We see this kind of investment as a good opportunity and we
are planning to invest in more capacity," said Vlera Devolli one
of the investors.
    The country of 1.8 million people has installed only 50 MW
of renewable capacities. It hopes to double them by the end of
this or early next year. 
    "We should not lock ourselves that lignite is the necessary
future," said Learta Hollaj, of the Institute for Development
Policy. "If you see the costs to health and environment, then we
have a lot of reasons to fight such a project".     

 (Reporting by Fatos Bytyci; additional reporting by Maja Zuvela
in Sarajevo; editing by David Evans)
 ((fatos.bytyci@thomsonreuters.com; +383 49 161 602;))