ContourGlobal is quitting the planned 500 MW Kosova e Re lignite power plant project in Kosovo. The company stated that it is now impossible for the project to meet the required milestones, citing, among others, the recent formation of a government led by a Prime Minister publicly opposed to the project.
Pippa Gallop, Research coordinator | 17 March 2020
As if sensing the world was in desperate need of some good news, ContourGlobal has announced today that it is quitting the planned 500 MW Kosova e Re lignite power plant project in Kosovo.
The company stated that it is now impossible for the project to meet the required milestones, citing, among others, the recent formation of a government led by a Prime Minister publicly opposed to the project.
This is excellent news for Kosovo, as it not only frees up resources to concentrate on much-needed energy efficiency, solar and wind investments, but it will also save the country an enormous amount of money.
Kosovo’s previous government never came clean about exactly how much it would cost households and the state budget to fulfill the terms of the power purchase agreement signed with ContourGlobal. But with a ‘target’ wholesale electricity price of EUR 80/MWh and a host of other guarantees provided to the company with regard to coal quality, land transfer and other costs paid by the state, it was clear that the project would cost Kosovo dearly.
The Director of the Energy Community Secretariat, Janez Kopač, several times warned that the contract could bankrupt the country, yet the project limped on. For years it looked like there was no rule that the Kosovo government was not willing to break for the sake of pushing the project forward. From a tender process that breached Kosovo legislation, to an environmental impact assessment without any public consultation, to the utterly illegal power purchase agreement, the legal violations kept piling up.
As a consequence, and given coal’s increasingly bleak future, ContourGlobal failed to find new financing for the project after the World Bank and EBRD confirmed they would no longer support it. With the details of the power purchase agreement gradually becoming public, domestic political opposition to the deal grew too. Kosovo and international civil society groups have opposed the project for almost a decade, and as time has worn on, their arguments have been proven right.
The parties forming Kosovo’s new government declared opposition to the Kosova e Re contract and were expected to annul it in the coming months, but finally ContourGlobal made the first move.
Kosovo must now decide how to move forward. In 2018, distribution losses alone accounted for almost 28 per cent of electricity – half technical losses and half commercial ones. The country has wasted years on pursuing coal projects that could have instead been spent addressing such losses and investing in sustainable forms of renewable energy, that are now more economically viable than coal.
There is no more time to lose on coal. It is no longer a resource, but a liability. It’s time for Kosovo to face the future and turn to clean, efficient energy.
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