Electricity demand in Kosovo will increase as much as 20% by 2030, driven by income growth and gradual electrification of the wider energy sector, implying an additional 1,200 gigawatt-hour (GWh) annual demand in 2030.
The intensity of electricity demand growth can be reduced by investment in networks and energy efficiency.
The launch last year of Kosovo’s first large-scale wind and solar power projects revealed promising performance results.
In this brief review, we examine the potential for meeting Kosovo’s energy demand growth, focusing on electricity. We find that Kosovo can seize on the readiness of international financial institutions and development banks to invest in the country’s energy transition beyond coal. Kosovo can use these funds to develop a world-class, energy-efficient, renewables-based economy. Technologies and market innovations to enable such a transition are already available, and include battery storage, demand-side response (DSR) and more robust interconnection.
Electricity demand growth and energy efficiency: We expect electricity demand will increase as much as 20% by 2030, driven by income growth and gradual electrification of the wider energy sector, implying an additional 1,200 gigawatt-hour (GWh) annual demand in 2030. However, this level of demand growth can be reduced by investment in networks and energy efficiency. A World Bank analysis indicates a conservative potential for highly cost-effective electricity savings, equivalent to at least 1,400 GWh annually by 2030. This includes savings of more than 800 GWh through investment to reduce network losses and 600GWh from investment in buildings’ energy efficiency. We note that at present, losses in the low-voltage distribution network are an extraordinary 26% (1,378 GWh) of total distribution network demand, shared equally between technical losses and “unbilled energy.”
There are three main sources of energy Kosovo can potentially use to satisfy this demand—lignite, gas and renewables.
Lignite: We no longer see any realistic prospect for external financing of a new lignite power plant in Kosovo. Meanwhile, the older of the two existing lignite power plants, Kosovo A, will have to close soon, implying a loss of 2,100 GWh annual supply, based on 2019 output.
Renewables plus battery storage: The launch last year of Kosovo’s first large-scale wind and solar power projects revealed the first performance data for such projects. The results are promising. Electricity generation equals or outperforms peer and neighbouring countries, strengthening the case for renewables deployment. Kosovo can also exploit tumbling battery costs to bolster this resource by developing a cutting-edge supply of electricity from domestic renewables plus storage, totalling an additional 1,500 GWh annually.
Balancing the grid: Kosovo would benefit from additional investment in interconnection and micro-renewables as a cost-effective way to deliver at least an additional 1,000 GWh annually by 2030.
Investment in demand-side response: One cost-effective way to reduce load shedding (when the power supply to a particular area is cut to protect against excessive demand) may be to establish a demand-side response (DSR) market that would contract with energy-intensive users to reduce demand when required.
Report in Albanian:
Përtej qymyrit: Investim në të Ardhmen Energjetike të Kosovës