NEWS RELEASE Contact for the Panel: Dr. Derek Taylor dmtenergy@gmail.com
Expert Panel Finalizes its Review of the Proposed Kosovo Power Project Assessment submitted to the Minister of Economic Development, Government of Kosovo Pristina, Kosovo, January 31, 2012 – The independent Expert Panel appointed to review a proposed power project in Kosovo has found that the project complies with all six World Bank criteria for considering support to coal-fired power projects. The findings were submitted to the Government of Kosovo and to the World Bank today. Demand for electricity in Kosovo exceeds internal supply capacity and, with a growing demand, the gap between supply and demand is expected to grow. The Government of Kosovo plans to close a 40-year-old power plant that is one of the worst polluting plants in South East Europe. To replace it, Kosovo plans to rehabilitate another aging plant and build a new, more efficient one. In order to build new power capacity, Kosovo has requested support from the World Bank in the form of a partial risk guarantee (PRG). In compliance with a policy that helps the Bank balance development needs with environment and climate change concerns, the Expert Panel reviewed Kosovo’s proposed project according to six criteria: (1) a demonstrated development impact; (2) assistance to low-carbon projects; (3) optimized energy sources (including energy efficiency options); (4) full consideration of viable alternatives to the least cost options, including environmental costs; (5) use of the best appropriate available technology for high efficiency; (6) an approach is developed to analyze environmental costs. The three distinguished energy experts that comprise the independent Panel are János Beér, Wladyslaw Mielczarski, and Derek Taylor. In their review of the project, they noted Kosovo’s fragile, post-conflict economy, its limited capacity for growth, and they agreed that the supply of secure and affordable electricity is vital for its development and stability. The Expert Panel unanimously agreed that the project met with the six criteria but, in this context, made a number of specific recommendations to the Government. Their position on the six criteria is summarized in the box below. As a part of its review of the project, the Expert Panel made a number of additional comments, observations and recommendations concerning future energy supply and use in Kosovo. These included recommendations for greater regional co-operation and connections, greater use of district heating in and around Prishtina, concerning the size of the new plant/units and the choice of mine site, about the benefits of lignite drying and that the new plant should be "carbon capture and storage ready". The Panel also strongly encourages the involvement of civil society in the various processes whenever this is possible through openness and transparency and fully developed consultation processes. On receiving the findings of the Expert Panel, Kosovo’s Minister of Economic Development, Besim Beqaj, said “It is our obligation to provide our citizens and industries with the most affordable and reliable electricity for homes’ heating, lighting, and for growth and job creation. We appreciate the Expert Panel’s independent analysis of our power development plans and we look forward to the project benefiting Kosovo’s economy.” Specifically concerning the six criteria the Expert Panel unanimously agreed that:
There would be a demonstrated development impact of the project, including improving overall energy security and reducing power shortage. The new power plant, together with a modernized Kosovo B, should result in increased system reliability and fewer power shortages. Assistance is being provided to identify and prepare low carbon projects. This work includes, among others, an assessment study on renewable energy resources, a prefeasibility study for small hydropower plants, updating an existing feasibility study for a hydropower plant at Zhur, assistance for studies on carbon capture and storage (CCS) and a proposed credit from the World Bank for energy efficiency improvements and renewables. Energy sources are being optimized and considerable efforts are being made to improve energy efficiency. However, there is a need for increased effort to reduce energy demand and the technical and commercial losses related to electricity supply and to promote energy conservation (such as through greater use of solar water heating).
NEWS RELEASE Contact for the Panel: Dr. Derek Taylor dmtenergy@gmail.com
After full consideration being given to viable alternatives it was agreed that the project would represent the least cost option for Kosovo, including after taking into account environmental costs. The Expert Panel also agreed that renewables should play an important role in the future energy mix with the construction of the Zhur hydropower plant, additional small hydro and wind power, sustainable biomass and biogas. The Panel noted that significantly increased renewables and, eventually, natural gas would require a more regional approach to energy markets and more interconnections with neighboring countries than are available today. The project will be designed using the best appropriate available technology to allow for high efficiency. The Panel strongly urges the Government of Kosovo to encourage bidders to provide a plant with the highest possible efficiency rather than simply meet a minimum efficiency level. Environmental externalities are being incorporated in project analyses. Calculations provided by the Ministry for Economic Development indicate that after the start up of a new plant, the closure of Kosovo A and rehabilitation of Kosovo B, coal consumption would reduce by around 27% for each unit of electricity produced, PM emissions would be reduced by over well over 90%, SOx and NOx by around 80% and CO2 by approximately 25%. The Panel noted the importance of establishing baseline emissions, especially for carbon dioxide and other greenhouse gases, to quantify the expected benefits. This will require greater monitoring capabilities. The Panel also recommended that studies continue to assess the impact of possible future carbon price variations on the economics of lignite-fired power plants in Kosovo. For more information: the Expert Panel and their Background Documents.
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