Electricity

Kosova e Re power purchase agreement challenged at Energy Community

Photo: Ministry of Economic Development Kosovo*

Published

May 14, 2019

Country

Comments

comments icon

1

Share

Published:

May 14, 2019

Country:

Comments:

comments icon

1

Share

Kosovar and international non-governmental organizations have filed an official complaint to the Energy Community’s (EnC) dispute settlement mechanism, challenging the legality of the power purchase agreement (PPA) for the planned Kosova e Re coal power project, which is currently awaiting ratification by the Kosovo* parliament, Bankwatch has said on its website.

The complaint was filed by Balkan Green Foundation, GAP Institute, Group for Legal and Political Studies, INDEP and CEE Bankwatch Network. In June last year, the EnC also announced that several elements of the PPA constitute state aid.

In 2015, the Kosovo* government chose power company ContourGlobal in a tendering procedure to build the 500 MW Kosova e Re thermal power plant (TPP).

The complaint alleges that the 20-year power purchase agreement, signed by the Kosovo* government with ContourGlobal in December 2017, fails to comply with the EnC Treaty rules on state aid because it provides ContourGlobal a range of benefits that give it an unfair advantage over other energy producers.

According to Bankwatch, the contract would also put an unbearable strain on the state budget and Kosovar electricity consumers as it guarantees that a state-owned company will buy all the electricity generated by ContourGlobal at a “target price” of EUR 80/MWh, which is much higher than current electricity prices in the region.

In addition, when the electricity is not needed, the state still guarantees an “availability payment” to the company, and it has committed to pay ContourGlobal’s network fees, reimburse it for a take-or-pay agreement that it signed with the state-owned lignite mine, and provide the land for the power plant to the company for a token fee of EUR 10.

Cost for consumers and taxpayers still unknown

Visar Azemi from Balkan Green Foundation has said that EUR 80/MWh would be bad enough, but that with all these additional fees, no-one seems to know how much all this will end up costing consumers and taxpayers.
Many people in Kosovo* can’t afford to pay for their electricity bills even now, so there is no chance they can absorb these increases, he said.

“To say the Kosovar government has made a terrible mistake would be an understatement,” added Pippa Gallop of CEE Bankwatch Network. “Whatever caused them to sign this absurd contract, it is up to Kosovo* parliamentarians, the Kosovar public, and international bodies like the EnC and European Commission to make sure it doesn’t get ratified, for the sake of Kosovo’s consumers and taxpayers.”

Agron Demi from Gap Institute said the authorities’ first priority should be to reduce the large electricity losses in the distribution system due to technical losses and non-payment of bills, because almost a third of Kosovo’s electricity is lost in this way. And, after that, they should increase the renewables share, he added, according to Bankwatch’s news release.

* This designation is without prejudice to positions on status and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.
Comments (1)
bajram / May 15, 2019

pune madheshtore nese percjellet me operacionet perkatese te rikultivimit sidomos me metoda alternative ekologjikisht te pranueshme te sanimit te tokave ,nji ser kompleks metodash.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

heatwave power exchange prices see europe serbia

What is behind electricity price spike in SEE: grid issues, and something more

13 July 2024 - Record high temperatures aren't the main cause of the record price increase on power exchanges, ranging from 50% to 170%

IRENA La Camera renewables must grow higher speed scale

IRENA’s La Camera: Renewables must grow at higher speed, scale

12 July 2024 - IRENA's Director-General Francesco La Camera warned of ongoing patterns of concentration in geography in renewables deployment as well as against complacency

serbia nuclear energy memorandum government institutes faculties vucevic djedovic

Serbian government forges nuclear energy alliance with 20 scientific institutions, firms

10 July 2024 - The memorandum is aimed at gathering experts from Serbia and abroad to examine the possibility of the use of nuclear energy

Albania declares eight winners at 300 MW solar power auction

Albania declares eight winners at 300 MW solar power auction

10 July 2024 - The lowest bid at Albania's solar power auction came in at EUR 39.7 per MWh, against a starting level of EUR 59.97 per MWh