The energy sector in Kosovo

Kosovo has around 1.8 million inhabitants. Its electricity generation is almost entirely dependent on two ageing lignite plants: Kosova A (5 units with 800 MW installed) and Kosovo B (two units with 678 MW installed). The current real capacity of these plants is around 915 MW altogether. They are infamous for their contribution to air pollution and Kosova B is the highest emitter of dust out of all the coal plants in the Western Balkans. 

Kosovo electricity generation 2010-2020 

Source: IEA Statistics with 2020 coal production taken from Energy Regulatory Office 2020 Annual Report. 

Kosova A and Kosova B are supplied with lignite from the adjacent Sibovc Southwest and Sitnica mines. Kosovo has very large lignite resources, totalling 12.5 billion tonnes, which it claims are the second largest in Europe and fifth largest in the world. It has no oil or gas extraction and no gas import infrastructure, thus providing an opportunity to leapfrog to a fully decarbonised energy system.   

However Kosovo’s progress in developing renewable energy was hampered for many years by plans for a new 500 MW lignite power plant – Kosova e Re – which diverted efforts and resources from the development of more sustainable forms of energy. It was only in early 2020 that the project was finally abandoned. 

Due to the dominance of lignite in Kosovo’s energy mix, it is very inflexible, and better interconnections with neighbouring countries are needed. A new 400 kV interconnection with Albania was completed in 2016 but due to political issues between Kosovo and Serbia, it only started operating in late 2020. The project has also been subject to corruption allegations. 

Kosovo does not have plentiful water resources like other Balkan countries, but this did not stop previous governments relying heavily on overblown small hydropower plant plans to meet the country’s 2020 renewable energy target. In 2013 it planned a totally unrealistic 240 MW of small hydropower plants by 2020, later revised down to a still-ambitious 120 MW, of which around half has been built.  

By the end of 2020 only 10 MW of solar photovoltaics had been installed, though more plans exist and the country has a solar manufacturer capable of manufacturing 200 MW per year. In 2018 Kosovo commissioned its first major wind farm, the 32 MW Kitka plant, and in September 2021 part of the 105 MW Bajgora plant started test operations.  

Despite the slow progress, Kosovo reached a 25.69 per cent share of energy from renewable sources in gross final energy consumption in 2019, exceeding its target of 25 per cent for 2020. However, this was mainly due to the revision of biomass consumption data rather than a real increase in investments. 

Different sources estimate different potential for solar and wind in Kosovo. These could be combined with Albania’s existing hydropower to make a much more flexible electricity system, and in December 2019, the two countries agreed to set up a common electricity market. 

In fact, a 2018 study by the World Bank, which had for years supported the construction of Kosova e Re, found that if taking carbon and pollution costs into account, a combination of renewables and battery storage would be the most cost-effective solution for Kosovo’s electricity sector. 

According to Kosovo’s Energy Regulatory Office, in 2020 transmission losses were at an acceptable level of around 1.18 per cent, but Kosovo has a serious issue with distribution losses, which amounted to 25.4 per cent. Around half of these are technical losses and half are commercial losses (electricity that is not paid for) and around half of the commercial losses take place in the north of Kosovo. Combined with artificially high demand through poorly insulated buildings, there is enormous potential for the country to save energy. 

For a more in-depth look at barriers to a sustainable energy transition in Kosovo and our proposals for how to overcome them, see our recent study with the Friedrich Ebert Stiftung: The Political Economy of Energy Transition in Southeast Europe – Barriers and Obstacles.