A very short introduction to Kosovo energy policy on sustainability
Kosovo’s economic competitive advantage is based on three pillars: energy, mining and agriculture. All these sectors are currently far from performing adequately. Consequently, a large rate of unemployment and poverty continues to be a norm. Among these three pillars, energy
is the paramount one as the source and backbone for a sustainable economic development. Kosovo energy sector is one of most debated policy issue while reliable electricity supply has been identified as the most binding constrain to economic growth by several studies, ultimately the energy sector remains one of the most challenging sectors that Kosovo has, a truly conundrum of the newborn nation. As a basic precondition for success, having a sustainable and affordable energy intertwined with efficient distribution and consumption is at the heart of any competitive market.
In Kosovo, energy sector faces copious challenges. First and foremost is the energy insufficiency, where gap between demand and supply is widening due to several factors. Insufficiency results on daily black-outs. The impact is explicitly converted to the business sector where according to the World Bank (2016) lack of reliable electricity is among top obstacles of doing business in Kosovo.
The most profound challenges of the Energy Sector are as following:
The two twin pillars of sustainable energy are energy efficiency, which is at embryonic level, while renewable energy is unutilized. Electricity production is 97% coal based.
In order for the energy in Kosovo to be reliable, sustainable and affordable, a new approach at the energy mix is required.
The energy sector is key for Instrument for Pre-accession Assistance funds due to its economic potential and the sizable amount of EU policy in the sector.
According to the European Commission, Progress Report for Kosovo (2016), quote “restructuring of the energy sector in Kosovo is on-going. Improved energy efficiency and maximal use of renewable energy sources have a vital importance in this process, to which Kosovo is committed.”
Furthermore, reforming Kosovo’s energy sector in line with the European model is a convoluted task. Kosovo as a signatory party of the Energy Community Treaty has assumed obligation to transpose the 3rd energy package with a focus to the renewable energy and efficiency and also the policy issues that derive from EU acquis. The target is already set for Kosovo, pursuant to (triple) 20/20/20 EU standards as follows: 9% increase of energy efficiency and 25% increase for a renewable energy production at the end of 2020.
Development of network energy market competition is another obligation that derives from this Treaty. These are the guidelines, towards EU accession in the Energy Policy.
Unfortunately, the government policy-making has been in a mind-set of lignite coal only and it has been falsely stated that Kosovo does not have renewable energy potential. Kosovo has a substantial renewable energy capacity for Wind, Solar and Hydro and biomass. According to GIZ (2015) the only wind potential is up to 300 MW.
Policies issue range from the mundane to the most complex one e.g. district heating is fully operational nationwide, a big opportunity to address energy efficiency. At the municipal level nothing has been done in the field of energy efficiency, not data to portray an accurate picture of household buildings. No structure for auditing the energy, and the promotion of energy efficiency was not sufficient. (INDEP, 2015). No mechanism to monitor progress in reaching 2020 targets.
The Kosovo Civil Society Consortium for Sustainable Development (2016) advocates that the rest of the energy gap in Kosovo can easily be met from renewable energy, as their potential is substantial and there is no need to build a new thermal power plant.
An example of simple policy with prolific impact: Kosovo government may use proper sticks and carrots. On one hand, households should be given opportunity to invest in efficiency, by small grants, low-interest loans, with a decent grace period. These should be enabled through creation of the Energy Efficiency Fund. On the other hand, the stick may be used to categorize buildings with higher efficiency and consequently pay less tax than those with lower or no efficiency.
In conclusion, the policies have a high magnitude of benefits ranging from economic growth, unemployment and living standards.