New Kosovo Power Plant will increase the energy price for consumers by over 50% !

Pristina 7 February, 2019 - Balkan Green Foundation (BGF) and the Institute for Development Policy (INDEP) demand immediate withdrawal from the contract for the construction of the New Kosovo Power Plant. This project will bankrupt Kosovo economically, will prevent the liberalization and integration of the electricity market, and represents a critical blow to the environment, health, and human rights. By disrupting this harmful project, Kosovo has the ability to build a European future through the transition of energy to renewable sources, energy efficiency and an integrated and liberal market in function of price affordability and consumer protection.

Despite a controversial tender contract, ContourGlobal has been selected as the main operator of the New Kosovo Power Plant. The Balkan Green Foundation and the Institute for Development Policy (INDEP) have continuously monitored the progress of the project for the construction of the new power plant, which even since its inception has led to numerous violations, irregularities, changes in generating capacity, etc. Even today, this project is continuing to prove that with its construction it will a) affect the increase of electricity bill tariffs, b) severely damage Kosovo budget and taxpayers, and c) send the country to bankruptcy. 

Kosova e Re has a guaranteed price of 80 euro/MWh. Kosovo has established the public company NKEC, which will serve as the only counterparty between Contour Global and the rest of the energy market in Kosovo. So, NKEC is forced to buy what the power plant generates even if the market does not require it. That energy NKEC will sell to KEDS or someone else at a cheaper price than the cost because the average regional price is 50-60 euros/MWh. Thus, the state and Kosovar taxpayers bear the responsibility of paying the price difference of minimum 20-30 euros/MWh. 

This was also highlighted by the Director of the Energy Community Secretariat, Janez Kopač, who in his presentation at the Agora Conference in Brussels said: "If New Kosovo Power Plant is approved by the Kosovo Parliament, the Republic of Kosovo will go bankrupt." Further, the Secretariat notes that elements of contracts signed for the project in question constitute violations of state aid legislation and free competition. No expertise is needed to conclude that the contract in which a private operator is guaranteed profit and all risks have been eliminated, covers all initial costs and is guaranteed to purchase the product without reserve for twenty consecutive years, constitutes nothing more than placing public capital for a private company to profit. The contract, therefore, violates the Constitution and the legislation that protects free competition and equality in the market. 

Also, this project will undoubtedly have an impact in the increase of the price of electricity bills for end consumers. The infographic example developed by Balkan Green Foundation and INDEP shows that a household consuming 700 kWh of energy at an average price of 5.5 cents per kWh currently pays around 40 euros. Whereas, if the New Kosovo Power Plant is implemented, the average price of 9 cents per kWh forces households to pay 50% more in their electricity bills. 

If this contract is implemented, Kosovo and its citizens will undertake unbearable and undeserved costs. Further, it should be emphasized that this project will not ensure the independence of the energy supply, will undermine the country's journey towards integration processes, and cause irreversible damage to the environment. Therefore, once again, Balkan Green Foundation and INDEP call on deputies of the Kosovo Assembly to defend the public interest by not voting in favor of New Kosovo Power Plant as such a project has no economic logic and bankrupts our country. 

 

Related articles