Republika e Kosovës Republika Kosova-Republic of Kosovo Qeveria –Vlada-Government MINISTRIA E ZHVILLIMIT EKONOMIK MINISTARSTVO EKONOMSKOG RAZVOJA MINISTRY OF ECONOMIC DEVELOPMENT ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Prishtina July 2016 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 TABLE OF CONTENTS Shkurtesat........................................................................................................................................................................................ 4 Kapitulli I ....................................................................................................................................................................................... 5 Përmbledhje ekzekutive............................................................................................................................................6 Kapitulli II....................................................................................................................................................................................... 7 Hyrje .....................................................................................................................................................................7 Kapitulli III ..................................................................................................................................................................................... 8 Metodologjia .............................................................................................................................................................8 Kapitulli IV ..................................................................................................................................................................................... 9 Sfondi .....................................................................................................................................................................9 4.1. Problemet më themelore prezente në sektorin e energjisë..........................................................................9 4.1.1. Ngecjet në ndërtimin e kapaciteteve të reja prodhuese të energjisë elektrike nga linjiti dhe në rehabilitimin e atyre ekzistuese ................................................................................................................................ 9 4.1.2. Tejngarkimi i sistemit të energjisë elektrike veçanërisht në sezonën e dimërit .........................................9 4.1.3. Kufizimet në sigurimin e importit të energjisë elektrike ............................................................................9 4.1.4. Mungesa e konkurrencës efektive në tregun e energjisë elektrike ........................................................... 10 4.1.5. Pjesmarrja e vogël e energjisë termike në konsumin fundor dhe mungesa e gazit natyror ..................... 10 4.2. Gjendja e përgjitshme e sektorin e energjisë ............................................................................................ 10 4.2.1. Energjia elektrike ...................................................................................................................................... 10 4.2.2. Linjiti për prodhimin e energjisë elektrike ............................................................................................... 11 4.2.3. Energjia termike ........................................................................................................................................ 13 4.2.4. Gazi natyror............................................................................................................................................... 14 4.2.5. Burimet e ripërtëritshme të energjisë ....................................................................................................... 14 4.2.6. Efiçienca e energjisë .................................................................................................................................. 16 4.2.7. Gjendja mjedisore ..................................................................................................................................... 17 4.3. Krahasimi i gjendjes së sektorit të energjisë me vendet e rajonit ............................................................ 18 4.4. Faktorët ndikues në problemet e sektorit të energjisë .............................................................................. 18 4.5. Aktivitetet kryesore ekzizistuese dhe të planifikuara në politikat aktuale për zhvillimin e sektorit të energjisë .................................................................................................................................................................. 19 4.6. Analiza SWOT .............................................................................................................................................. 20 Kapitulli V ..................................................................................................................................................................................... 21 Objektivat strategjike për zhvillimin e sektorit të energjisë për periudhën 2016-2025 ........................................ 21 5.1. Fokusi i strategjisë së energjisë për periudhën 2016-2025........................................................................ 21 5.1.1. Vizioni dhe misioni .................................................................................................................................... 21 5.2. Objektivi 1.Sigurimi i furnizimit të qëndrueshëm dhe cilësor me energji elektrike dhe me kapacitete të nevojshme për një sistem stabil elektroenergjetik ................................................................................................. 21 5.3. Objektivi 2.Integrimi në tregun rajonal të energjisë ................................................................................ 22 5.4. Objektivi 3.Rritja e kapaciteteve ekzistuese të sistemeve termike dhe bdërtimi i kapaciteteve të reja 22 5.5. Objektivi 4.Zhvillimi i infrastrukturës së gazit natyror ........................................................................... 23 5.6. Objektivi 5.Përmirësimi i shfrytëzimit me efiçiencë të energjisë,burimeve tëripërtëritshme të energjisë dhe mjedisit sipas kërkesave të Traktatit për Themelimin e Komunitetit të Energjisë dhe MSA-së ......... 23 Kapitulli VI ................................................................................................................................................................................... 24 Alternativat, politikat dhe masat për arritjen e objektivave ................................................................................. 24 2 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 6.1. OBJEKTIVI 1. SIGURIMI I FURNIZIMIT TË QËNDRUESHËM DHE CILËSOR ME ENERGJI ELEKTRIKE DHE ME KAPACITETE TË NEVOJSHME PËR NJË SISTEM STABIL ELEKTROENERGJETIK .............................................................. 24 6.1.1. Alternativat e furnizimit me energji elektrike të nevojshme për plotësimin e nevojave të konsumit dhe plotësimin e nevojave të sistemit elektroenergjetik ............................................................................................... 25 6.2. Objektivi 2. Integrimi në tregun rajonal të energjisë ............................................................................... 31 6.3. Objektivi 3. Rritja e kapaciteteve ekzistuese të sistemeve termike dhe ndërtimi i kapaciteteve të reja 32 6.4. Objektivi 4.Zhvillimi i infrastrukturës së gazit natyror ........................................................................... 33 6.5. Objektivi 5.Përmirësimi i shfrytëzimit me efiçiencë të energjisë,burimeve të ripërtëritshme të energjisë dhe mjedisit sipas kërkesave të Traktatit për Themelimin e Komunitetit të energjisë dhe MSA-së ......... 34 Kapitulli VII .................................................................................................................................................................................. 35 Hapat e ardhshëm për zbatimin e strategjisë......................................................................................................... 35 Shtojca 1. Gjendja e sektorit të energjisë.................................................................................................................................... 38 Shtojca 2. Analizat e parashikimit të kërkesave për energji elektrike sipas 3 skenarëve të konsumit .................................. 59 Shtojca 3. Analiza e adekuatësisë së gjenerimit dhe balancës mes kërkesës dhe prodhimit të energjisë elektrike 2016-2025 ........................................................................................................................................................................................................ 63 Shtojca 4. Kërkesat për thëngjill për tre skenarët e gjenerimit të energjisë elektrike ............................................................ 74 Shtojca 5. Projeksionet zhvillimore të sistemeve të energjisë termike..................................................................................... 75 Shtojca 6. Gazi natyror ................................................................................................................................................................ 80 Shtojca 7. Projeksionet e zhvillimit të centraleve elektrike nga BRE-të .................................................................................. 82 3 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ABBREVIATIONS KEEA EU CG RES EC EE SEE ENTSO/E EU KEK GWh HPP EC KEK KEDS KESCO kg kJ KKDFE km KOSTT ICMM KfW kVh kW kWh Ktoe MF MIE MESP MLSW MTI MW MWh MED DH DSO TSO MO PPP KEEAP KRESAP GoK REPOWER ECS TAP Kosovo Energy Efficiency Agency European Union Cogeneration Renewable energy sources European Commisison Energy Efficiency Southeast Europe European Network of Transmission System Operators for Electricity European Union Energy Corporation of Kosovo - Public Supplier of Electricity Giga Watt hour Hydropower Plant European Commisison Energy Corporation of Kosovo Kosovo Electricity Distribution Company Kosovo Electricity Supply Company Kilogram Kilojoules Kosovo Electricity Distribution and Supply Kilometer Kosovo Transmission System and Market Operator Independent Commission for Mines and Minerals Reconstruction Bank (KreditanstaltfürWiederaufbau) Kilovolt hour Kilowatt Kilowatt hour Kiloton oil equivalent Ministry of Finance Ministry of European Integration Ministry of Environment and Spatial Planning Ministry of Labour and Social Welfare Ministry of Trade and Industry Megawatt Megawatt hour Ministry of Economic Development District Heating Distribution System Operator Transmission System Operator Market Operator Public Private Partnership Kosovo Energy Efficiency Action Plan Kosovo Renewable Energy Sources Action Plan Government of Kosovo Project supporting Kosovo in the energy sector, financed by USAID Energy Community Secretariat Trans Adriatic Pipeline 4 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 TPP ECT AI Thermal Power Plant Energy Community Treaty Administrat5ive Instruction CHAPTER I 5 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 EXECUTIVE SUMMARY One of the main factors of economic development of the country and increasing the welfare of the society is the security of energy supply. Since the development of a sustainable energy system requires time, the right decisions for the future of the energy sector should be defined much earlier. The Energy Strategy 2016-2025 sets out the basic objectives of the Government in the development of the energy sector, taking into account sustainable economic development, environmental protection, sustainable and quality supply to customers, efficient use of energy, development of new conventional and renewable generation capacities, creation of a competitive market, development of the gas system and creation of new jobs in the energy sector. Some of hte basic problems facing the energy sector in Kosovo includes delays in the construction of new coal-based electricity generation capacities and rehabilitation of existing plants; insufficient generation capacities to cover the peak demand in the winter season; lack of secondary and tertiary power reserves in the system due to lack of flexible generators, since 97% of domestic generation is based on lignite; limited capacities of thermal energy power systems; lack of natural gas infrastructure; significant technical and commercial losses in the electricity distribution network; the inability of the transmission system operator to control cross-border electricity flows; underuse of the energy saving potential; underuse of potential renewable energy resources; lack of an effective competitive market in the electricity sector. The Program of the Republic of Kosovo 2015-2018 puts a high priority on the energy sector, particularly electricity provides for concrete measures related to construction of new electricity generation capacities from fossil and non-fossil fuels; measures for efficiency energy use and measures for the use of renewable energy sources and cogeneration and measures for developing the conditions to bring natural gas in Kosovo. Particular attention in the program is paid on environmental protection. The National Development Strategy 2016-2021 adopted by the Government in January 2016, in Pillar 4: Infrastructure, provides for four priority measures for the development of the energy sector: 1. Build new and sustainable power generation capacities, 2. Establishment of an open and competitive energy market 3. Decrease energy consumption through energy efficiency measures, 4. Rational use of renewable energy sources. Each of these energy objectives has concrete actions. This document served as a basic reference for the drafting of the Energy Strategy. Energy sector holds an important place in the Stabilization and Association Agreement which entered into force on April 1, 2016. Under this agreement, Kosovo is obliged to fulfill obligations related to the integration of regional common market, which includes the Contracting Parties to the Energy Community. Implementation of the acquis related to: competition in the energy market; protection of the environment; energy efficiency; renewable energy sources, is a serious obligation that Kosovo must fulfill in the energy sector. Energy Strategy 2016-2025 addresses these challenges. The Energy Strategy of the Republic of Kosovo 2016-2025 addresses these challenges. The Energy Strategy of the Republic of Kosovo 2016-2025, based on the analysis of problems of the energy sector and the best way to resolve them, has defined five strategic objectives: 1. Security of sustainable and quality supply of electricity with the necessary capacities for a stable electricity system 2. Integration in the Regional Energy Market; 3. Enhancing existing capacities of thermal systems and building new capacities; 4. Development of natural gas infrastructure; 5. Improving the targets of energy efficiency and renewable sources and the environment as per the obligations of the Treaty Establishing the Energy Community and SAA. For the realization of the strategic objectives, the team of experts tasked to develop the energy strategy has conducted analysis based on a number of factors that affect the energy sector, such as: forecasting the demand based on the economic development forecasts according to the National 6 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Development Strategy 2016-20211 and the Economic Reform Program, measures to reduce technical and commercial losses in the distribution system, the impact of thermal energy system network expansion, use of renewable resources for sanitary water heating, energy efficiency measures, market integration, etc. To achieve these objectives, policies and measures have been recommended as assessed by the team for the drafting of the Energy Strategy for suitability. To create the conditions for the provision of reliable and secure energy, through the development of generation, transmission and distribution capacities, capable of smoothly addressing the increased demand for energy, taking into account the diversification of resources, the purchasing power of consumers, the efficient use of energy, maximal utilization of renewable energy resources and protecting the environment during energy activities and free competition. Key measures to achieve the strategic objectives - Construction of new generation capacities of electricity and replacement of old ones to cover the electricity demand of customers and requirements for system regulatory capacities, in operating conditions within a common market with Albania; - Improving the distribution network by increasing efficiency and reducing costs; - Fulfilling the conditions for the integration of Kosovo in the regional common market of energy and thus ensuring implementation of obligations to the Treaty establishing the Energy Community and obligations of SAA as regards the opening of the electricity market; - Expanding the capacities of existing thermal power systems and preparing the conditions for the construction of new systems; Preparation of conditions for the development of the natural gas system; Improving efficiency in energy use and fulfillment of obligations under the ECT and SAA for energy efficiency Greater use of potential energy sources and renewable energy and fulfillment of ECT obligations and SAA regarding RES; Merger of the energy market with the Republic of Albania; Improving the environmental conditions during activities of operators of the energy sector, meeting the ECT and SAA requirements, according to a national action plan, harmonizing it as much as possible with security of supply policies until the entry into operation of rehabilitated and new capacities. - CHAPTER II INTRODUCTION The Energy Strategy of the Republic of Kosovo 2016-2025 (hereinafter the “Energy Strategy”) is a long-term basic document for the development of the energy sector. The role, importance, content and procedures of developing this document are based on the Law on Energy and the Administrative Instruction No. 02/2012 on Procedures, Criteria and Methodology for the Preparation and Adoption of Strategic Documents and Plans for their Implementation. The Energy Strategy is based on policy documents and strategies of the Government of Kosovo and the results of tests and studies conducted in the energy sector financed by Kosovo’s institutions or external donors. 1 National Development Strategy 2016-2021, is the main policy document of the government for economic development. 7 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 The Program of the Government of the Republic of Kosovo 2015-2018 gives priority to uninterrupted and sustainable power supply, using local fossil and non-fossil resources and encourages diversification of sources to supplement domestic energy needs. The development of the liberalized energy market and environmental protection are also integral parts of this program. The National Development Strategy 2016-2021 approved by the Government in January 2016 gives a special place to energy, under four pillars of the Government’s priority. This strategic document of overall strategic development for Kosovo provides for four measures for the development of the energy sector: 1. Build new generation and renewable energy capacities, 2. Establishment of an open and competitive energy market 3. Decrease energy consumption through energy efficiency measures, 4. Rational use of renewable energy sources. A high priority of the Government is the implementation of obligations as per the Stabilization Association Agreement. Energy is addressed separately in article 114, stating, among other. - In accordance with the relevant EU acquis, the Parties shall develop and strengthen their cooperation in the field of energy consistent with the principles of the market economy and the Treaty establishing the Energy Community, signed in Athens on 25 October 20051. - Cooperation shall be developed with a view to the gradual integration of Kosovo into Europe’s energy markets. Cooperation may include assistance to Kosovo as regards in particular: (a) improvement and diversification of supply and improvement of access to the energy market, in accordance with the EU acquis on security of supply and the regional energy strategy of the Energy Community, and applying EU and European rules on transit, transmission and distribution and restoration of electricity interconnections of regional importance with its neighbors; (b) helping Kosovo implement the EU acquis on energy efficiency, renewable energy sources, and the environmental impact of the energy sector, therefore promoting energy saving, energy efficiency, renewable energy and studying and mitigating the environmental impact of energy production and consumption; (c) formulating of framework conditions for restructuring of energy companies and cooperation between undertakings in this sector, in line with the EU internal energy market rules on unbundling. The drafting process of the Energy Strategy took into account all policies and measures defined in the aforementioned documents. CHAPTER III METHODOLOGY The Secretary General of the Ministry of Economic Development took a decision to establish the Working Group to draft the Energy Strategy. The team includes experts representing government institutions and other stakeholders related to the energy sector: - MED; - OPM; - MF; - MTI; - MESP; - ERO; 8 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 - KOSTT; - ICMM; - KEK; - KEDS; - KESCO. Drafting of the document was done in teamwork, sharing tasks for each chapter. In the process of conducting the required analysis for the preparation of the document, closer technical groups have been established for each technical field: electricity, thermal energy, natural gas, renewable energy sources, energy efficiency and integration into the regional energy market. After agreements were reached in close groups, the results were then distributed to the working group and the document was finally adopted and submitted for further approval procedures. Structuring of the document and its drafting was done in line with the requirements of the Administrative Instruction (approved by the Government) No. 02/2012. CHAPTER IV BACKGROUND 4.1.MAIN ISSUES OF THE ENERGY SECTOR 4.1.1. Delays in constructing new electricity generation capacities based on lignite and rehabilitation of existing ones Power plants Kosovo A and Kosovo B have a joint installed capacity of 1478 MW, but due to their age, their operational capacity currently ranges at 915 MW. Current generation capacities are outdated, needing constant repairs and operating with inefficient technology.2. Although the 2009-2018 Energy Strategy envisages the construction of new generating capacities to replace Kosovo A, for various reasons the process was delayed and only in 2015 the selection of the bidder for the construction of Kosova e Re Power Plant took place and the process is ongoing. The feasibility study for the rehabilitation of TPP Kosovo B is underway with the support of the European Union. 4.1.2. Overloads in the electricity system, particularly in the winter season The electricity distribution network is also a weak link of the electricity system in Kosovo. Technical and non-technical losses are rather high. Such losses are particularly high during the winter, as a result of the overload in the system due to increased demand for heating of spaces, in the absence of other suitable sources for heating of spaces, in particular in collective housing apartments and the services sector. 4.1.3. Restrictions in securing electricity imports Kosovo Electricity Transmission, System and Market Operator, KOSTT, which owns the electricity transmission network, is yet to gain control of electricity interconnection flows. Consequently, the electricity import for domestic supply cannot be planned freely and with suitable conditions. 2 National Development Strategy (2016-2021) 9 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 4.1.4. Lack of effective competition in the electricity market Although the legal framework for the energy sector, adopted in 2010, has enabled the gradual opening of the electricity market, thus far we have no competitive market in electricity, primarily because the DSO doesn't have control over all distribution networks and KOSTT doesn't have control over cross-border electricity flows, as requirements for non-discriminatory market access. 4.1.5. Small share of thermal energy in the final consumption and lack of natural gas Despite an improved situation in Pristina with heating, the share of thermal energy from district heating systems (obtained heat) in the final energy consumption is still very small and has little impact in reducing the system’s load. The lack of natural gas further aggravates the situation. 4.2. GENERAL OVERVIEW OF THE ENERGY SECTOR 4.2.1. ELECTRICITY The origin of the problem of electricity supply in Kosovo starts with the deliberate destruction of the electricity system in all its elements, from the previous regime, particularly in the last decade of the last century. Since 1984, there has been no construction of new electricity generation capacities with the exception of some small hydro capacities, but without an impact in solving the problem of security of electricity supply. Currently, the majority of the power plants’ units are at the end of their technical lifetime. Had there been a normal development with stable power supply, virtually all capacities of TPP “Kosova A” should have been either decommissioned or rehabilitated (as it happened in similar cases in SEE countries). Despite all the problems and difficulties that the energy system faced, there was a steady increase with the exception of 2014 (see Figure below). A more detailed description of the situation of the energy sector is shown in Annex 1 of this document. KËRKESA PËR ENERGJI ELEKTRIKE DHE MBULIMI I SAJ konsumi ENERGJIA ELEKTRIKE (GWH) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 prodhimi importi eksporti 5,862 5,584 5,467 5,570 5,275 5,506 5,399 4,944 4,584 5,503 4,259 4,283 5,167 5,314 5,520 4,894 3,908 5,037 4,798 3,541 4,333 4,527 3,105 3,312 3,997 3,999 2,835 3,483 3,152 3,220 1,913 2,569 921 785 572 756 932 627 315 484 458 611 685 278 371 458 553 349 393 540 779 236 80 170 125 114 195 41 1 452 684 553 280 192 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 VITET 10 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Figure 1 Evolution of the electricity demand and its coverage Despite an increase of the amount of generation over the years, in existing TPPs and HPPs, there is no evidence of a sustainable generation system and consequently a sustainable security of electricity supply. Operating with obsolete capacities and without required rehabilitation, the reliability of the generation system is far from adequate. Electricity generation faces serious problems in terms of the technical security of the system as a result of ever greater obsolescence of the plant and there is an urgent need to take measures. Adding the environmental problems resulting from old generation technology in use on the one hand and international obligations that Kosovo has to reduce pollution as a result of electricity generation, on the other, taking of measures to improve the generation conditions is an imperative, however taking into account the security of supply under the existing conditions of capacity operation. The electricity demand was largely covered by domestic generation and partially from imports. In situations of overloads of the power system, there was a planned load shedding (according to the ABC plan), which have seen an overall decline in recent years. Although not canceled entirely, this plan is not being applied. From 2000 until 2015, 538.25 million Euros were spent in electricity imports. In some cases there was government intervention to subsidize imports. Since 2012 import subsidies were discontinued. After the privatization of the electricity supply company, the cost of imported electricity has fallen significantly as a result of more efficient procedures of purchasing electricity. Infrastructural capacities of the electricity distribution system didn’t follow this increase, primarily as a result of low investments in the distribution network. Consequently, the distribution system of electricity was constantly overloaded, especially during the winter season. In May 2013 the electricity distribution and supply system moved into private ownership. By end 2014 the process of legal unbundling of DSO and supply was completed. In recent years, especially after the privatization of the distribution network, significant investments were made in the distribution network (20 million year) and further investments are taking place in projects planned by the DSO. Despite improvements in recent years, technical and commercial losses in 2015 were 31.8%3. A more detailed description of the situation of the energy sector is shown in Annex 1 of this document. Due to the inability to control the distribution and supply system in some municipalities in northern Kosovo, around 5% of electricity remains unbilled. A positive indicator is the fact that the Public Supplier KESCO has managed to continuously improve its performance (see Annex 1, item 1.1). The soundest link of the chain of the energy system of Kosovo is the transmission system. Due to significant investments in this system, today it is considered as one of the most efficient and stable systems in the region. However, unfortunately, for political reasons, as a result of having no membership in ENTSO-E, Kosovo performs limited activities as it is unable to control cross-border flows. 4.2.2. Lignite for generation of eletricity4 Lignite is the most important energy resource of Kosovo, supplying 97% of total generation of electricity (TPP Kosovo A and TPP Kosovo B). Most important lignite basins in Kosovo are: - Kosovo Basin; - Dukagjini Basin, and - Drenica Basin. 3 4 Source: KEDS Draft Energy Strategy 2013-2022, updated with data from KEK. 11 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Figure 2 shows shows the lignite Basins of the Republic of Kosovo. Figure 2. Lignite basins in Kosovo. 5 Estimated lignite resources in all of Kosovo are given in table 1. Tab. 1. Lignite reserves in the Republic of Kosovo6 RESERVES (t) Lignite basins Geological Kosovo 10, 091, 000,000 Dukagjini 2, 244, 830,000 Drenica (f. Skenderaj) 106, 631,000 Total 12,442,461,000 Balance7 8,772,000,000 2,047,700,000 73,188,000 10,892,888,000 Non-balance8 1,319,000,000 197,130,000 33,443,000 1,549,573,000 Coal supply from existing mining of existing power plants will be done by 2024, according to the mining plan and capacity. For safe supply of existing and new generation capacities, a new mine must be opened with a capacity of over 430 million tons which would allow for the supply of existing power plants in the next 30 years. Opening of the new mine will ensure safe and sufficient supply for existing as well as new generation capacities. The government took a priority decision for the opening of South Sibovc Field with a capacity of 430 million tons of coal. This project was approved by KKI and the Government.of Kosovo.9. From the entire quantity of coal generated, 97.5% of the total amount available is used to supply Kosovo’s power plants, whereas 2.5% is dedicated to the market for consumption needs in the industry, household, agriculture and services. 5 Revising clause No. 152, University of Prishtina, 2008, on –”Study to assess researches and geological coal reserves in Kosovo”, Kosovo Basin, Prishtina 2007, p. 81. Institute INKOS, 6 Source: Mining Strategy of the Republic of Kosovo for the period 2012-2025, 7 Balance reserves are the reserves where the caloric power of coal is over 5.450 kJ/kg, 8 Non-balance reserves are reserves the caloric value of coal is below 5.450 kJ/kg, 9 Single Project Pipeline of Infrastructural Investments - Energy, Project No. 1 12 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 4.2.3. THERMAL ENERGY District Heating Sector in Kosovo consists of four systems. DJ “Termokos” – Prishtina, DH Gjakova, DH “Termomit” – Mitrovica, and DH in Zveçan. This sector has limited coverage domestically, meeting roughly 3-5 % of the total demand for heating in Kosovo.10 After the war, several projects have been developed in the heating system which have had an impact in improving the supply for consumers (DH “Termokos”). The Co-generation project for supply of thermal energy from TPP Kosovo B and rehabilitation of network and substations have allowed a more quality supply of existing consumers and possibilities for connection of new ones. The following is a table with data on the thermal energy system from district heating systems of Prishtina and Gjakova, including total losses for both systems (for more details see Annex 1.2). Table 2 Presentation of indicators of both obtained heating systems (district heating)11 2010 2011 2012 2013 2014 7.15 4.53 4.66 5.04 5.95 Generation of heating (ktoe) 0.69 0.57 0.46 0.46 0.77 Own consumption (ktoe) 2015 17.29 0.2 Losses in transmission and distribution (ktoe) 1.08 0.92 0.76 0.91 1.11 3.21 Available for final consumption (ktoe) Consumption in household (ktoe) Consumption in services (ktoe) 5.38 3.50 1.88 3.04 1.98 1.06 3.44 2.24 1.21 3.67 2.38 1.28 4.07 2.64 1.42 13.88 9.02 4.86 Figure 3 shows losses in the thermal energy system in both district heatings (Prishtina and Gjakova) for which there are available data. Humbjet në bartje dhe shpërndarje të ngrohjes së përfituar në % 25.0 20.0 20.3 16.3 15.1 18.1 18.7 18.6 2013 2014 2015 15.0 10.0 5.0 0.0 2010 2011 2012 Figure 3 Presentation of technical losses in TERMOKOS and DH Gjakova12 In 2012 MED financed a project for a study in district heating in Peja, Prizren, Gjilan and Ferizaj13. Study on district heating in Peja, Prizren, Gjilan and Ferizaj financed in 2012 by MED. 10 ERO - Official report (non-official) 2015 Source: Annual electricity balance for respective years. This excludes district heating of Mitrovica and Zvecan. 12 District heatings in Mitrovica and Zvecan are yet to submit data. 11 13 Study on district heating in Peja, Gjilan and Ferizaj financed in 2012 by MED. 13 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 4.2.4. NATURAL GAS Kosovo is part of countries with no natural gas infrastructure. Despite this, the legal basis is in placefor natural gas in accordance with the Third Package of EU legislation, as approved by the Assembly of Kosovo in June 2016. Kosovo along with Albania have applied with a joint project for natural gas. The gas supply is expected to come from the TAP pipeline. General data for this project are presented in Annex 6 of this document. A grant of 300,000 Euros for the pre-feasibility study for this project under the WBIF platform. The project is expected to be approved under the single pipeline of infrastructure projects of interest for the Meeting of the Energy Community in October 2016, Ministerial Council of the Energy Community. Kosovo gasification project is ranked seventh in the list of priority infrastructure projects energy, approved by the National Investment Council and by the Government.14 Annex 6 describes data required by the Energy Community Secretariat for proposing the gas pipeline Albania - Kosovo. 4.2.5. RENEWABLE ENERGY SOURCES Renewable Energy Sources (RES) represent an important source of energy which Kosovo owns, with a highly underutilized potential. The use of these resources for energy generation represents a longterm target for the implementation of three energy policy objectives of the country, which are: support of overall economic development; increased security of energy supply and environmental protection. In view of these objectives, it is necessary to apply fiscal and financial incentives for all types of RES, as well as a system of green certificates. To encourage the use of renewable energy, Kosovo has established a system of feed-in tariffs for water, wind, photovoltaic and biomass energy resources, including biogas. These incentive measures for RES aim to fulfill relevant European Union (EU) requirements, transposition and implementation of which is done under the monitoring of the Energy Community Secretariat. Renewable energy sources are of particular importance for use for heating purposes, namely for the generation of thermal energy. As such, they are also part of the Heating Strategy. Since there is a need to minimize the use of moist lignite and unsustainable use of wood for heating purposes, the use of solar energy, municipal solid waste and wood waste are seen as the most promising sources for heating of spaces and sanitary water. Support for a greater use of renewable energy was provided by development policies of the forestry sector designed and implemented by the Ministry of Agriculture, Forestry and Rural Development, which continue to treat wood as an important source of thermal energy. For this reason, the Forestry Development Strategy (2010-2020), has given priority to supporting the appropriate use of systems and methods that lead to better utilization of forests for energy production. Energy sector laws, in particular the Law on Energy, continuously treat renewable energy sources in terms of promoting the optimization of their use, including the setting of annual and long-term energy generation targets from these sources. In order to support and promote the use of Renewable Energy, Ministry of Economic Development has drafted a ten-year action plan for RES, as a policy document for this important energy sector. In accordance with legal obligations and those taken under the Energy Community Treaty (ECT), MED has set RES targets for 2011-2020, taking into account the possibilities and potentials of Renewable Energy that available to Kosovo. The fulfillment of these targets is monitored by the Ministry of Economic Development, which is responsible for reporting progress on the Energy Community Secretariat (ECS) in Vienna. 14 Single Project Pipeline of Infrastructural Investments - Energy- 14 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 MED also has adopted secondary legislation concerning specific measures to promote greater use of RES. An important role for the promotion of Renewable Energy lies with the Transmission System Operator and the Distribution Operator. They are mandated by law to give priority to electricity generated from renewable energy sources, in line wiht the limits specified in the Grid Code. System operators establish and publish rules regarding the costs for technical adaptations required for the integration of RES into the system. These rules are approved of the Energy Regulatory Office (ERO). Also, ERO ensures that transmission and distribution tariffs for RES generator are non-discriminatory, especially to those from peripheral regions. ERO is responsible for issuing certificates of origin for electricity generated from RES, which is responsibility defined in the Law on Electricity. An incentive measure for Renewable Energy is also the legal obligation that the public supplier of energy purchases the amount of energy generated from renewable sources from the generator, with a regulated tariff, as defined by ERO through a prescribed methodology, which takes into account compensation from the public supplier of additional costs of purchasing electricity from renewable energy sources. ERO is legally responsible for regulatory activities in the field of Renewable Energy , developing methodologies for regulated tariffs and issuing licenses for energy activities and authorizations for the construction of power capacities from renewable energy sources. ERO is also obliged to issue certificates of origin for district heating from thermal energy generated from renewable sources or energy generated in a co-generation process of electricity and thermal energy. Thermal energy for which a certificate of origin is issued has priority for purchase by the public supplier in comparison to other amounts of energy for which there is a certificate of origin on the basis of which the generator of thermal power has the right to issue and sell green certificates. Support schemes for Renewable Energy Sources To meet the goals of energy from Renewable Energy, special rule are defined by ERO to determine the level of required energy capacity and the criteria and procedures for admission to the support scheme, rights and obligations of generators of electricity from renewables, for which a certificate of origin was issued, including the rights and obligations of the public supplier in connection with electricity for which a certificate of origin has been issued, rights and obligations of KOSTT (independent transmission system and market operator), the financing of the scheme, integration of electricity generated from renewable energy sources in the electricity system. Feed-in tariffs and the deadilne of the power purchase agreement for energy from Renewable Energy Sources Primary sources of energy from RES used in the generation of electricity admitted in the support scheme are: Water, wind, biomass and photovoltaics. RES projects with capacities within the level of planned targets are based on the scheme of Feed-in tariff which are determined by the Energy Regulatory Office. Feed-in tariffs vary from different technologies as follows: - Hydro power (small hydro) 67.3 Euro / MWh; - wind energy: 85 Euro / MWh; - Energy from biomass 71.3 Euro / MWh and photovoltaics 136,4 Euro / MWh. Upon the review of the incentive feed-in tariff scheme for hydropower and wind power, in 2016, the Energy Regulatory Office has increased the feed-in tariff for electricity from water, from previous 63.3 to 67. 3 Euros / MWh, whereas for wind energy the deadline for the sale of energy has been extended from 10 to 12 years. The 12-year deadline of the power purchase agreement also applies for photovoltaic energy, while for HCV energy it is 10 years. Annex 1, point 1.3 gives a more detailed description of the policies and measures applied by Kosovo’s institutions to promote the use of RES. Whereas Annex 7 provides projections for the 15 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 development of HCVs which are taken into account upon the analysis of covering the demand for electricity by 2025. 4.2.6. ENERGY EFFICIENCY Energy Efficiency in Kosovo, along with the need and efforts to ensure sufficient energy generation from existing power plants and other alternative sources, is considered by the Government of Kosovo an essential component of strategic planning and economic development of Kosovo. In the field of energy efficiency, important programmatic political, legal and institutional steps have been taken to promote it. Kosovo Agency for Energy Efficiency has been established as well as the Certification Commission of Energy Auditors and Managers. Also there have been significant investments in improving energy efficiency. The legal framework and projects developed / and under development to improve energy efficiency in Kosovo In addition to the basic laws of the energy sector, since 2012 the Law on Energy Efficiency is in place, as well as a number of Administrative Instructions (AI) and various regulations, including: - Administrative Instruction for the promotion of energy efficiency of end users and energy services; - AI on Labeling of Energy Use; - AI on Energy Audit; - Technical Regulation on Energy Audit; - Regulations on internal organization of the Kosovo Energy Efficiency Agency; - Regulation on the establishment of the Commission for Certification of Energy Auditors and Managers. Strategic plans in the field of energy efficiency: Kosovo Action Plan for Energy Efficiency (KEEAP) 2010 to 2018, was approved and enivsages energy savings of 9% or around 92 ktoe, by 2018. The first medium-term action plan of the Kosovo Energy Efficiency (KEEAP) 2010-2012 is already implemented and foresees energy savings of 3% or around 31 ktoe by 2012, which has been achieved. The report of the first mid-term plan of Energy Efficiency (preliminary results indicate that the target was reached in the level of 3% from the defined 3.1%). The second mid-term National Energy Efficiency Action Plan (KEEAP) 2013-2015, envisaged savings of 3% or about 31ktoe. Thus far, 18 municipalities have drafted Municipal EE Plans 2014-2020 and also aprproved them in their respective municipal assemblies. BRK-funded projects: Energy audit of public service buildings for 2011-2012-2013-2014-2015-2016, each year with € 144,000.00. Public Campaign on Energy Efficiency and Renewable Energy Sources (RES), 2011-2012-20132014-2015-2016, € 50,000.00 per year. Projects funded by donors / borrowings: 16 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Supervision, monitoring, verification and evaluation of energy efficiency measures in schools and hospitals in Kosovo (Funded by the European Commission with 15.6 m Euros. The project started and measures will be implemented in 63 schools and 2 hospitals. The study and implementation of energy efficiency measures in central public buildings (funded by WBIF / WB. Financing value is $ 31m. Negotiations between MED-MF-WB completed in May 2014 and in June the WB Board approved the loan. After the signing of the agreement between the MoF and the WB, the project was ratified by the Kosovo Assembly. For the first 5 buildings, the design was prepared as well as bidding documents for the implementation of EE measures. Implementation of energy efficiency measures in municipal buildings financed by WBIF / KfW. Financing value is 7,500,000.00 Euros. A pre-agreement was signed between MF and KfW. Support for the private and residential sectors with EE measures, financed by the EBRD, with the amount of funding at € 12M. (Emphasis will be given to the private sector (Small and Medium Enterprises SMEs), where the first contracts were already made with a commercial bank, TEB (value € 5M) and Kosovo Rural Crediting KRK (value € 1.5M ). The project is in the implementation phase. Thus far € 8.2 M was spent, with € 4M for SMEs and € 4.2 M for the household sector. Through UNDP, a series of projects has been developed to promote EE and two municipalities have been helped in drafting Municipal EE Plans 2014-2020 as well as witth concrete measures in public lighting in the municipality. Other details for activities in the field of energy efficiency have been described in Annex 1, item (1.4.) Kosovo, as a signatory of the Energy Community Treaty, has an active role in meetings of the Energy Community in Vienna, and also actively participates in the Coordination Group for EE, harmonizing its legitimacy with the relevant European directives. All these activities, plans and measures that have been developed and which are being developed, are showing significant reduction in consumption and expensive energy imports, enabling better strategic planning of energy policies and more effective enforcement. However, this is only the beginning of a good work, but more remains to be done, as there are significant potentials in the implementation of energy efficiency in Kosovo, along with the need for savings and improving the quality of life of the citizens of Kosovo, primarily in the residential sector. Annex 1, item 1.4. gives a more detailed description of the situation in terms of activities in the field of energy efficiency. 4.2.7. ENVIRONMENTAL STATE Taking into account that electricity is generated from power plants with an obsolete technology, designed at a time when there weren't significant environmental protection requirements, we are in a dire situation in terms of environmental protection. This is best shown in the following table with concrete indicators of pollution compared to allowed levels with EU requirements. Table 3 Emissions from power plants of kosovo in the last two years15. TPP Kososva TPP Kosovo A 15 Dust (mg/Nm3) 2015 2014 44 57 SO2(mg/Nm3) 2015 2014 289 418 KEK- Environmental state report 17 Nox(mg/Nm3) 2015 2014 725 714 Co2(mg/Nm3) 2015 2014 259.67 262.91 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 TPP Kosovo B EU* criteria 645 50 860 327 400 511 821 500 814 220.7 216.04 *- Current emissions [(mg/Nm3) 6 (%) dry] and limits as per the European Commission. According to the upper indicators regarding the situation with dust in Kosovo A is very good thanks to the significant investments implemented from own budget of KEK in 2013. Also, there are improvements, thanks to government investment and foreign donations (World Bank), in hydraulic transportation of ash, but still there is much work and investment needed to bring the situation within the desired parameters under these operating conditions and in the situation where the generation ability to ensure a reliable supply is required in these circumstances Annex 1, point 1.5 gives a more detailed description of the environmental situation in the energy generation sector from thermal power plants. Taken from the Environmental Status Report on KEK.16 4.3.COMPARISON OF THE SITUATION OF THE ENERGY SECTOR WITH THE COUNTRIES IN THE REGION Almost all SEE countries face problems in covering energy demand. Especially in covering electricity demand all SEE countries are dependent on imports. Annex 1, pont 1.6. of this document shows comparative data of indicators of energy with other countries of SEE. 4.4. CONTRIBUTING FACTORS TO THE PROBLEMS OF THE ENERGY SECTOR Factors contributing problems associated with the energy sector in Kosovo are as follows: 1. Investments in generating capacities. Despite the fact that Kosovo has significant lignite-based energy resources, since 1984 there has been no investment in the construction of new capacities or substantial rehabilitation of existing ones that would enable a stable electricity supply. Existing generation technology doesn't meet the environmental criteria defined by EU legislation. 2. Investments in the distribution network system. Insufficient investments in the electricity distribution system have led to a situation where the system cannot withstand the increased load, particularly in the winter season. This led to a level of technical losses which has further deteriorated the system. 3. High technical and non-technical losses Non-technical losses as a result of unauthorized use of energy and the delivery of a significant amount of electricity in certain municipalities in northern Kosovo, where the DSO and the supply company have no control, led to severe problems in the distribution and supply system. 4. Kontrolli i rrjedhës ndërkufitare nga KOSTT-i. KOSTT, as transmission system operator, continues to have no control of cross-border electricity flow, which has also impacted on the ability of suppliers to achieve favorable contracts for electricity import. In 2015, KOSTT has signed a connection agreement with ENTSO-E but this agreement is not yet in force. 5. Liberalization of electricity market In Kosovo there is still no effective open, free and competitive energy market. There is only one supplier who supplies all customers with regulated prices and has long-term power purchase agreements from all domestic producers. If there were more suppliers in the energy market in Kosovo the supply would be more stable. 6. Use of electricity for heating; Electricity is significantly used for heating of living spaces, water, cooking and sanitation. This is due to the lack of other alternatives to supply other energy 16 KEK- Environmental state report 18 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 7. 8. 9. 10. products. Consequently, the household sector is the largest electricity consumer. When we add the uncontrolled and unauthorized use of electricity, the problem is further worse. Non-rational use of energy Despite the considerable potential for energy savings, this potential is not being used sufficiently. RES The use of renewable energy is also modest in meeting the needs of sanitary water heating in particular in the household and services sectors. If the energy-saving potential and RES were exploited better the electricity system would be in a better state and therefore the problems would be mitigated. Waste is yet to be used as a source of energy, despite the potential identified by studies carried out to date. Small participation of thermal energy Despite significant improvements in the supply of heating from the cogeneration system, the share of heating energy from thermal energy (district heating) systems in final energy consumption is small compared to the possibilities. Non-implementation of the feasibility study on natural gas Despite the opening of real opportunities for the inclusion of Kosovo in regional natural gas projects, we do not have a feasibility study for the construction of natural gas infrastructure. 4.5. MAIN EXISTING AND PLANNED ACTIVITIES IN CURRENT POLICIES TO DEVELOP THE ENERGY SECTOR The Government of Kosovo, with the support of other state and international institutions, has undertaken a range of activities to improve the situation in the energy sector in Kosovo. The main activities developed by the Government and other institutions of Kosovo include: - Harmonization of secondary and primary legislation. After approvals in June 2016 of laws on the energy sector, which have transposed the requirement of the Third Package of EU legislation on the energy sector, within 9 months the secondary legislation will be prepared for the implementation of such laws; - Support of the construction process of Kosova e Re Power Plant; - Support for the process of the project for rehabilitation of Kosovo B; - Study on the need for investments for operation of TPP Kosovo A until the operationalization of new generation capacities. - Liberalization of electricity market Activities on implementing soft measures to open the energy market under the guidelines of the Energy Community Secretariat; - Approval of the list of priority investment projects in energy infrastructure sector 17 which included 13 projects of strategic importance; - Application of the list of projects of common interest for the Energy Community for the natural gas project (along with Albania); - Developing the process for the establishment of a common energy market with Albania; - Approval of action plans for RES and EE and implementation of measures for their implementation; - Activities in the process of transposition of EU legislation for energy efficiency, with a focus in efforts to finding modalities for the establishment of the Energy Efficiency Fund; - Intensive activities in the establishment of One Stop Shops to facilitate the development of projects in the field of RES; - Implementation of Decision No. 04/156 for decommissioning and dismantling of gasification facilities, fertilizer, heating and other facilities that do not impede the normal operation of active units of TPP Kosovo A. - Implementation of measures set out in the National Development Strategy 2016-2021 for the energy sector. 17 Single Project Pipeline of Infrastructural Investments 19 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 4.6. SWOT ANALYSIS Strengths: Sufficient lignite reserves with wide opportunities for electricity generation with competitive prices Sufficient transmission interconnection capacities to provide for cross-boundary trade; Industry experience in production and exploitation of the lignite in Kosovo Sufficient human resources for recruitment and development of skilled staff which may cover the needs of the sector Legislative framework in accordance with EU directives; Republic of Kosovo is a party to the Treaty establishing the SEE Energy Community Adequate institutional mechanisms for the functioning of the energy sector, in particular independent regulatory authorities and independent transmission system and market operator; Relatively favorable RES potentials, which enables the diversity of energy sources; Development of a common Kosovo-Albania electricity market. High potential for energy efficiency Opportunities: Increased demand for electricity in Kosovo and the region with opportunities for fast sector development Restructuring and full reforms of the energy sector in line with EU Directives Liberalization of the market regionally and the development of the sector with the private capital Potentials for attracting strategic investors Construction of new lignite-based generation capacities Construction of district heating systems in larger cities Reduction of technical losses and increased investments in distribution 20 Weaknesses: Current generation capacities are old and do not secure sustainable energy generation; High level of technical and commercial losses in the distribution system; Lack of access to manage the energy sector in the northern part of Kosovo; Limited access for self-financing of investments; Delays in investments in modernizing and developing generation and distribution capacities; Irregular supply with electrical and thermal energy; Low share of RES in electricity generation; Partial dependence on electricity imports. Low efficiency in the generation process and energy use; Environment pollution from lignite mines and energy generation; High use of electricity for heating; Lack of control by KOSTT of cross border electricity flows. Threats: Unexpected increases of prices of imports of liquid fuel and unforeseeable obstables of supply with oild products; Possible global financial crisis, with negative impacts in foreign investments Continued obstructions by Serbia in the energy sector Increased prices of electricity and increased demand for imports, until the development of new generation capacities Lack of electricity available in the region Non-functioning of open and competitive electricity market in the region Non-fulfillment of strategic objectives in the right time, particularly in reference to sufficient ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Increased EE in energy generation and efficient use of energy by end-consumers Development of renewable of energy resources with private capital Development of renewable of energy resources with private capital Kosovo’s access to international financial mechanisms for increased EE. . capacities for electricity supply. CHAPTER V STRATEGIC OBJECTIVES FOR THE DEVELOPMENT OF THE ENERGY SECTOR FOR THE PERIOD 2016-2025 5.1. THE MAIN FOCUS OF THE ENERGY STRATEGY FOR THE PERIOD 2016-2025. The Energy Strategy is prepared based on the Law on Energy. The scope of the law on energy includes electricity, natural gas and thermal energy. This law defines the duties and responsibilities in determining policies and measures for renewable sources and energy efficiency which are outlined in national action plans as mandatory documents approved by the Ministry responsible for energy, and based on the strategic objectives of the Energy Strategy. 5.1.1. VISION AND MISSION VISION The Energy Strategy aims to create a developed energy sector, which is frinedly to the environment and health, supporting economic development and social wellbeing in Kosovo, under a free and competitive market. MISSION The Mission of the Energy Strategy is to create the conditions for the provision of reliable and secure energy, through the development of generation, transmission and distribution capacities, capable of smoothly addressing the increased demand for energy, taking into account the diversification of resources, the purchasing power of consumers, the efficient use of energy, maximal utilization of renewable energy resources and protecting the environment during energy activities. 5.2. OBJECTIVE 1. SECURITY OF SUSTAINABLE AND QUALITY SUPPLY OF ELECTRICITY WITH THE NECESSARY CAPACITIES FOR A STABLE ELECTRICITY SYSTEM Provision of sustainable, high quality, safe and uninterrupted energy is one of the main conditions for the development of a country. The problem of electricity supply has become an acute problem that requires a solution, but is very costly due to the nature of the investments needed. Although looking it 21 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 from the standpoint of annual generation and consumption balance of electricity Kosovo is not worse than the countries of the region, it faces huge problems in terms of securing necessary capacities to cover Peak demand, particularly in winter season and in meeting the regulatory capacity requirements of the power system. A big problem for the energy sector is the fact that interventions in the rehabilitation of the existing and construction of new capacities will require very large and nearly simultaneous investments. Despite the opening of markets and regional integration are expected to ensure mitigation effects in terms of supply problem, it is necessary to take measures as soon as possible to develop appropriate capacities, taking into account the international obligations for environmental protection, climate change and the fulfillment of the minimum criteria for ENTSO-E power systems states (KOSTT is in the process of membership in ENTSO-E).18). To achieve the goal of a reliable supply of electricity and required capacities for a stable power system, significant challenges must be addressed related to: - Outdated generating capacities. Insufficient generation capacities to address the demand for electricity consumption (especially in the winter season) and for balancing the electricity system; - High environmental pollution resulting from activities of power generation from obsolete thermal power plants; - Unsatisfactory utilization of energy renewable resources for the generation of electricity; - High technical and non-technical losses in the distribution network to increase many system requirements; - Failing to control cross-border flows of electricity from KOSTT. - Lack of control of the distribution system and public supplier with electricity from DSO and public supplier, in four municipalities of Kosovo. 5.3. OBJECTIVE 2: INTEGRATION IN THE REGIONAL ENERGY MARKET The government is committed to implement all obligations of the Energy Community Treaty (ECT) and the SAA, related to the creation of a free and competitive energy market. Creation of a common energy trading zone between Kosovo and Albania is given priority by the Government. To achieve the objective of integration into the regional energy market we must address challenges related to: - Creating an effective competitive domestic market of energy with the operation of more than one supplier, ensuring the removal of obstacles related to the control of the transmission and distribution network as two of the main conditions for ensuring a level playing field; Creating a common area of energy trade between Kosovo and Albania; Creation of an energy stock exchange with Albania; Effective implementation of requirements related to the deregulation of electricity prices to generation; Elimination of cross-subsidies between categories of consumers as well as limiting state subsidies in the energy sector; Complete lack of natural gas infrastructure; 5.4. OBJECTIVE 3. ENHANCING EXISTING CAPACITIES OF THERMAL SYSTEMS AND BUILDING NEW CAPACITIES ; Construction of collective housing buildings in all cities of Kosovo, but in particular the larger ones, has taken off in unprecedented levels since the end of the war. New settlements with collective apartment buildings have been constructed and are under construction. Treatment of thermal energy for heating 18 ENTSO-E European Network System Operators of Electricity 22 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 through central systems is of particular importance, especially in meeting the needs for space heating of such facilities concentrated in urban areas of major cities. The use of electricity for heating spaces is a high burden for the power system, moreover in a situation where large amounts of electricity are used in an unauthorized manner, on the one hand, and the generation capacities of electricity are limited on the other side. Use of other types of energy such as firewood, oil and its products, etc., is inconvenient for collective residential buildings and buildings of the service sector. To achieve this objective the following challenges must be addressed: - Significant losses in the distribution network of thermal energy systems; - Small exploitation of thermal power generation capacities, particularly TERMOKOS, after connection with the co-generation system, because of inadequate distribution network; - Large non-technical losses; - Lack of concrete initiatives for the development of thermal energy infrastructure by municipalities where there is a large concentration of collective housing facilities; - Lack of concrete initiatives on the use of thermal systems for cooling of spaces, heating sanitary water, steam for industrial needs, etc. - Securing finances for the implementation of funds. 5.5. OBJECTIVE 4. DEVELOPMENT OF NATURAL GAS INFRASTRUCTURE Offical government policy is to promote and support the inclusion of Kosovo in regional projects for the supply of natural gas. TAP project19 has offered great opportunities to Kosovo to connect in the international network of natural gas. In this regard, depending on the regional developments of gas projects in Southeastern Europe within the ECT, the Government remains committed to use all opportunities to be involved in joint projects of the Energy Community on natural gas. To achieve this objective the following challenges must be addressed: - Lack of Gas System Operator; Lack of feasibility studies, and Lack of infrastructure. 5.6. OBJECTIVE 5. IMPROVING THE TARGETS OF ENERGY EFFICIENCY AND RENEWABLE SOURCES AND THE ENVIRONMENT AS PER THE OBLIGATIONS OF THE TREATY ESTABLISHING THE ENERGY COMMUNITY AND SAA. Improvement of the energy efficiency will contribute to a reduced demand for energy of all types and as a result increased security of gy supply for its citizens. In KEEAP 2010-2018, Kosovo has committed to meeting the savings target of 9% of overall energy consumption, as set by the EU Directive2006/32/EC. Also, Kosovo, as a contractual party of the Energy Community Treaty, has assumed the obligation to implement new EU policies deriving from European Directive 2012/27/EC on energy efficiency. To promote renewable energy sources, according to this strategy, in the next decade the goal is to develop the necessary legal, regulatory and programmatic infrastructure to allow for the fulfillment of the binding target of RES of 25% share of energy from RES in gross final energy consumption by 2020 and its reviewbased on the results achieved and on the basis of new policies to encourage the use of RES. 19 Trans Adriatic Pipeline from Azerbaijan to Italy via Albania. 23 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Based on the decision of the Ministerial Council of the EC, Kosovo is obliged to draft and adopt national plans for reducing environmental emissions and limit working hours of old plants. To achieve this objective the following challenges must be addressed: - Financing of energy efficiency and renewable energy source programs; - Barriers related to a number of laws that prevent the establishment of funds other than the Kosovo budget, - Lack of experiences in the application of public private partnership projects in the field of energy efficiency and renewable energy sources; - Lack of institutional municipal structures, especially for energy efficiency, and lack of necessary human capacities specialized in municipal institutions. CHAPTER VI ALTERNATIVES, POLICIES AND MEASURES CONSIDERED TO ACHIEVE THE OBJECTIVES 6.1. OBJECTIVE 1. SECURITY OF SUSTAINABLE AND QUALITY SUPPLY OF ELECTRICITY WITH THE NECESSARY CAPACITIES FOR A STABLE ELECTRICITY SYSTEM Insufficient generation capacity and the old power system constitute one of the weakest links of the chain. Interventions in the rehabilitation and construction of new capacities are necessary to recover the system and to enable it to address, quantities and quality, of the electricity demand for all customers and needs for system stability respecting the criteria for operators whose countries are members of the European Network of Transmission System operators (ENTSO-E). Kosovo is a Contracting Party to the Energy Community and has signed the Stabilization Association Agreement and as such assumed international obligations to implement the acquis communautair on energy, related to environmental protection and climate, competition, renewable energy, and energy efficiency. Kosovo needs to make radical interventions in the generation system in these conditions, which is difficult enough for most developed economies, and moreover is obliged to implement them to create security of supply. harmonization of security of supply policies with electricity and environmental policieis is rather challenging for power systems such such as the system of Kosovo. Limiting the operational hours of old energy capacities, as required for Contractual Parties of the Energy Community for the period 2018-2023, is a hihgly severe restriction that directly affects the security of supply, especially in the period 2018-2020. Adding this to the decline of investors’ interests to invest in small markets such as the market of Kosovo, on one side, and the undeveloped economy of Kosovo, on the other, finding alternative and adequate policies for the development of the sector energy in these conditions becomes even more difficult. Investments in the transmission network system have resulted in a more consolidated transmission system, able to meet the needs of the common market with the Republic of Albania and the flows of electricity with other neighboring countries. The problem of the lack of membership of KOSTT in ENTSO-E is a serious obstacle to be resolved as it represents a serious barrier to regional integration and opening of the local market for new suppliers. The electricity supply in terms of the transmission system has no obstacles. A weak link of the power system is the distribution and supply system. Significant technical and non-technical losses are a big burden to the system and consumers. Environmental problems caused by activities of energy supply at all levels of the system are also problems that require solutions. 24 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 The following text describes alternatives, policies and measures to achieve the objective of reliable security of supply. 6.1.1. Alternatives of energy supply needed to meet consumer needs and to meet the needs of the power system.. Description of the basis of support for the alternatives considered All three options are based on three scenarios of electricity consumption, while scenarios of consumption are based on the impact on the demand for electricity from several factors, such as economic growth according to the strategies and programs adopted by the Government, measures and efficiency policies energy, including energy efficiency in final consumption of energy, efficiency of distribution systems of electricity and thermal energy, expansion of thermal capacities. Thus, the results of the analyzes are based on a combination of major factors contributing to the electricity demand. Demand analysis are summarized in Annex 2. All three alternatives have, as a common point, electricity generation from small hydro power as per RES targets (see Annex 7). Analysis of adequacy (adequacy of the electricity system) to cope with the load of the system is based on three scenarios of electricity in Kosovo, in combination with the base scenario of electricity generation forecast in Albania. However, analysis of the balance between generation and demand are also made for the separate system when the system operates within a common area with Albania. Annex 3 shows in detail the analyses and the database of the system adequacy and balance between generation and demand of both systems. A. Alternative 1 is based on: 1. Construction of "Kosova e Re” TPP, with net capacity of 450 MW with the possibility of connecting the co-generation system with a capacity up 10% of net capacity of the plant. The plant will be constructed in compliance with all environmental criteria as defined in D 2010/75/EC; 2. Rehabilitation of TPP "Kosova B" to bring it in line with environmental criteria and energy efficiency requirements as per Directive 2010/75/EC on industrial plants and increase its generation capacity. Rehabilitation is expected to be completed by 2020; 3. Continuation of the operation of TPP "Kosova A", until the entry into operation of TPP "Kosova e Re", assuming that Kosovo will be able to negotiate the deferral of obligations regarding the limitation of hours of operation of old plants, because of hte major risk to security of supply. 4. Construction of generation capacities from renewable energy sources as per RES targets (see Annex 7); 5. Operation of two power systems within a common trading zone Kosovo - Albania; 6. Reduction of technical and commercial losses as per the Master Plan of DSO; 7. Efficient use of electricity as per the measures foreseen to achieve Objective 5. SWOT Analysis - ALTERNATIVE 1 Strengths: Weaknesses: More secure supply as a result of 25 TPP "Kosova A" will operate with ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 the operation of TPP "Kosovo A" without restrictions (See the balance of generation scenario 1 in Annex 3); Feasibility study of TPP "Kosova B" is in process and is expected to be finalized in 2017. The study was supported by the European Commission. Study on funding modalities is being developed by REPOWER project funded by USAID; The construction process of "Kosova e Re" is being developed successfully; Significant improvement of environmental and health conditions as a result of generation activities of electricity generation after the rehabilitation of TPP Kosovo B and Construction of TPP “Kosova e Re”. No obstacles for state intervention in the event of the Company's inability to find financing for rehabilitation as the Third Package allows state aid in cases of risks to security of supply. Increased efficiency of the use of coal and achievement of EE targets as per the Directive 2012/27/EC. Sufficient interconnection capacities to cope with crossborder flows of electricity; Increasied interests of private capital to invest in the potential use of RES for electricity generation. Opportunities: conditions that do not meet the requirements of the Energy Community; There is a lack of own flexible regulatory system capacities which risks the fulfillment of technical requirements of TSO in the future when it becomes a member of ENTSO-E; System reserves are secured from imports Continued high emissions of environmental pollutants Unstable reliability available of TPP "Kosova A" units. Threats: Support for two projects (TPP Kosova e Re and TPP Kosovo B) from IFN Placing surpluses of the system after the rehabilitation of TPP Kosovo B and construction of TPP Kosova e Re in the common market with Albania and regional integrated market. 26 Delays of the process of project development (construction of TPP “Kosova e Re” and rehabilitation of TPP Kosova B); Delays of the process of KOSTT's membership in ENTSO-E and inability to implement ‘soft measures’ for an effective opening of the market and integration in the regional market. ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Note: Analysis of the balance between generation and demand for electricity and generation adequacy analysis are shown in Annex 3 - Scenario 1 Generation B. Alternative 2 is based on: 1. Construction of "Kosova e Re” TPP, with net capacity of 450 MW with the possibility of connecting the co-generation system with a capacity up 10% of net capacity of the plant. The plant will be constructed in compliance with all environmental criteria as defined in D 2010/75/EC; 2. Rehabilitation of TPP "Kosova B" to bring it in line with environmental criteria and energy efficiency requirements as per Directive 2010/75/EC on industrial plants and increase its generation capacity. Rehabilitation is expected to be completed by 2020; 3. Continued operation of TPP "Kosova A", until the entry into operation of "Kosova e Re", respecting the obligations to limit operational hours (older plants are allowed to work a total of 20,000 hours during the period 2018-2023) ; 4. Construction, on the initiative of private investors, of flexible hydro capacities to meet the regulatory system reserve ; 5. Construction of energy generation capacity from renewable energy sources as per RES targets (see Annex 7); 6. Operation of two power systems within a common trading zone Kosovo - Albania. 7. Efficient use of electricity as per the measures foreseen to achieve Objective 5. SWOT ANALYSIS - OPTION 2 Strengths: Weaknesses: Existing TPPs will work under the conditions set by the Energy Community; Ensure the necessary capacity adjustment own reserve system according to ENTSO-E criteria; Feasibility study of TPP "Kosova B" is in process and is expected to be finalized in 2017. The study was supported by the European Commission. Study on funding modalities is being developed by REPOWER project funded by USAID; The construction process of "Kosova e Re" is being successfully developed at this stage; Significant improvement of environmental and health conditions as a result of generation 27 Significant costs of supply as a result of the need to import the lacked amount of energy until the rehabilitation of TPP Kosovo B and particularly in the critical year of rehabilitation. Insufficient security of supply until the entry into operation of new capacities as a result of the limitation of working hours of TPP Kosovo A Unstable reliability available of TPP "Kosova A" units. ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 activities of electricity generation after the rehabilitation of TPP Kosovo B and Construction of TPP “Kosova e Re”. Increased efficiency of the use of coal and achievement of EE targets as per the Directive 2012/27/EC. Sufficient interconnection capacities to cope with crossborder flows of electricity; Increased interests of private capital to invest in the potential use of RES for electricity generation. Opportunities: Threats: Support for two projects (TPP Kosova e Re and TPP Kosovo B) from IFN Placing surpluses of the system after the rehabilitation of TPP Kosovo B and construction of TPP Kosova e Re in the common market with Albania and regional integrated market. Possibility to increase investments in renewable sources Delays of the process of project development (construction of TPP “Kosova e Re” and rehabilitation of TPP Kosova B); Delays of the process of KOSTT's membership in ENTSO-E and inability to implement ‘soft measures’ for an effective opening of the market and integration in the regional market. Note: Analysis of the balance between generation and demand for electricity and generation adequacy analysis are shown in Annex 3 - Scenario 2 Generation C. Alternative 3 is based on: 1. Construction of "Kosova e Re” TPP, with net capacity of 450 MW with the possibility of connecting the co-generation system with a capacity up 10% of net capacity of the plant. The plant will be constructed in compliance with all environmental criteria as defined in D 2010/75/EC; 2. Rehabilitation of TPP "Kosova B" to bring it in line with environmental criteria and energy efficiency requirements as per Directive 2010/75/EC on industrial plants and increase its generation capacity. Rehabilitation is expected to be completed by 2020; 3. Reconstruction of 4 units of TPP Kosovo A as per the order (see relevant tables for generation capacities as per Option 3 of generaiton in Annex 3 20); 4. Construction, on the initiative of private investors, of flexible hydro capacities to meet the regulatory system reserve ; 20 The data on generation capacities in the case of TPP Kosovo reconstruction are assements from KEK staff based on installed desig capacity in the 60's and 70's and as such cannot be used as baseline data for decision-making. 28 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 5. Construction of energy generation capacity from renewable energy sources as per RES targets (see Annex 7); 6. Operation of two power systems within a common trading zone Kosovo - Albania; 7. Efficient use of electricity as per the measures foreseen to achieve Objective 5. SWOT ANALYSIS - OPTION 3 Strengths: Weaknesses: Existing TPPs will work under the conditions set by the Energy Community; Ensure the necessary capacity adjustment own reserve system according to ENTSO-E criteria; Meets the large lack of energy with the case of rehabilitation of TPP Kosovo B Creates possibilities for exports of electricity beyond the needs of Kosovo and beyond the needs of the integrated market with Albania. Feasibility study of TPP "Kosova B" is in process and is expected to be finalized in 2017. The study was supported by the European Commission. Study on funding modalities is being developed by REPOWER project funded by USAID; The construction process of "Kosova e Re" is being developed successfully; Increased efficiency of the use of coal and achievement of EE targets as per the Directive 2012/27/EC. Sufficient interconnection capacities to cope with crossborder flows of electricity; Opportunities: Lack of a feasibility study for treating TPP Kosovo A and costs thereof. Lack of proper studies of markets in the case of expanding generation capacities beyond the local market needs. Inability to ensure financial support from IFN for coal projects which go beyond covering the security of supply needs. Increased amounts of carbon emissions and recudtion of possibilities for the diversification of generation sources. Threats: Support for two projects (TPP 29 Delays of the process of project ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Kosova e Re and TPP Kosovo B) from IFN Placing surpluses of the system after the rehabilitation of TPP Kosovo B and construction of TPP Kosova e Re in the common market with Albania and regional integrated market. Increasing the needs of consumption and encouraging investors for diversified sources. Need for security of supply opens way to project supports. Diversification of sources development (construction of TPP “Kosova e Re” and rehabilitation of TPP Kosova B); Delays of the process of KOSTT's membership in ENTSO-E and inability to implement ‘soft measures’ for an effective opening of the market and integration in the regional market. Generating capacities from lignite go beyond the security demand that has no financial support from IFN Significant costs of investments and increased prices Note: Analysis of the balance between generation and demand for electricity and generation adequacy analysis are shown in Annex 3 - Scenario 3 Generation General conclusion after comparing the alternatives of three SWOT analyses Considering the: - advantages, weaknesses, opportunities and threats for the three alternatives; - energy potential of Kosovo, - conditions and political, economic, social and environmental circumstances, to achieve the objective of ensuring stable and quality supply of electricity and capacities necessary for a stable power system it is wise to follow a policy that supports the construction of new generation capacity from coal and rehabilitation of those in operation within the lifetime of their design; promoting the use of energy efficiency; promoting rational use of RES; diversification of sources; utilization of lignite capacities with an expired lifetime design until the entry into new production of capacity new, and also carry out feasibility studies as necessary; regional market integration, starting with the integration of the energy market with Albania, as the two systems are complementary to each other. To achieve the objective of security of sustainable and quality supply of electricity with the necessary capacities for a stable electricity system the following measures are envisaged : - Construction of TPP “Kosova e Re” and rehabilitation of TPP Kosova B; Improvement of operational abilities of TPP Kosovo A to generate reliably a higher amount of electricity until the entry in operation of TPP Kosova e Re, respecting the obligations of the Energy Community. Feasibility study on how to treat TPP Kosovo A, taking into account environmental, efficiency and competition considerations, as per the third package of EU legislation on the energy sector; Security coal to meet the needs for generation of electricity 30 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 - Replacement of old distribution network and its expansion according to the development of the projected demand; Reduction of technical and non-technical losses as per a dynamic envisaged in the DSO Master Plan Effective opening of the market, with the operation of more suppliers and where consumers have a choice of supplier. Feasibility study to place smart meters; If deemed feasible, installation (in the long run) of smart meters as per the dynamic plan to be approved by ERO. Approval and implementation of legal acts deriving from the primary legislation of energy sector approved in 2016 which aim to effectively open the energy market and integrate it with the regional one; Drafting of curricula of university programs as necessary for the labor market which is expected to be opened during the process of constructing new generation capacities. Support for SMEs to be more competitive in various stages of the process of works, during the construction of new capacities. Implementation of measures related to other strategic objectives, which have an impact in increasing the security of supply with electricity (efficiency, RES, district heating, natural gas, market integration ). 6.2. OBJECTIVE 2: INTEGRATION IN THE REGIONAL ENERGY MARKET Preparation of conditions of a contractual party of the Energy Community for integration into the regional energy market implies implementation of the acquis communautaire on energy as defined in the third package of EU legislation for the energy sector including: directives on the internal electricity market; internal natural gas market; energy efficiency; renewable energy, environment protection. Kosovo is committed to implement the obligations deriving from the Treaty establishing the Energy Community and the SAA. In practical terms, obligations in question relate to: Creating the conditions for a liberalized market within a regional energy market where discrimination is not allowed regardless of the licensing country within the Energy Community, on the principle of reciprocity; Effective separation of energy activities (generation, transmission, distribution and supply); Regulatory energy independence as per the Third Package of EU legislation on the energy sector; Establishment of energy stock market together with another country (in our case with Albania); Merger of markets with the neighboring countries; Clear procedures for the definition of public service obligations; Protection of consumers in need without damaging competition; Significant restrictions on state subsidies; Monitoring by the Energy Community Secretariat of several cases that could impact competition, such as: o Setting of public service obligations o State subsidies of energy enterprises; o TSO certification; 31 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Obligations of the state and of energy enterprises to promote the use of energy efficiency, use of renewable energy and environmental protection according to the decisions of the Ministerial Council of the Energy Community; Regional cooperation. Although Kosovo has made sufficient steps towards transposition of EU legislation as well as reforming the energy sector, through the privatization of the activities of electricity distribution and supply and legal separation of these activities to open way for access of interested parties concerned for the use of the distribution network; separation of ownership of TSO as per the requirements of the Third Package of EU legislation; operationalization of an independent Regulator of Energy; establishment of state aid office, etc., there is still much work towards the liberalization of the energy market and implementation of environmental criteria related to electricity generation. It should be noted that the implementation of the acquis communautaire by EU member states has had a very high cost, which was ultimately translated in increased prices of energy billed to customers. However, over the years and with market maturity of all products and services related to measures for the implementation of acquiscommunautaire, there are clear signals of price stabilization. To achieve the objective of regional market integration, the following measures are envisaged. 1. Approval and implementation of secondary legislation for the implementation of energy sector laws approved in June 2016 by the Assembly of Kosovo 2. KOSTT certification and membership in ENTSO-E; 3. Membership of ERO in ACER; 4. Creating a common trading area of energy between Kosovo and Albania; 5. Deregulation of generation prices; 6. Appointing and licensing suppliers of last resort; 7. Strengthening the capacities of the Regulator, the Competition Authority and the Office of the State Aid to monitor the liberalized market of electricity and natural gas and the prohibition of subsidies, other than those required and only in cases determined by requirements Third package of EU legislation on the energy market. 8. Licensing of more suppliers in the energy market after a level playing field has been established for all parties. 9. Implementation of ‘soft measures’ as per the ECT guidlines 6.3. OBJECTIVE 3 - ENHANCING EXISTING CAPACITIES OF THERMAL SYSTEMS AND BUILDING NEW CAPACITIES Increased urbanization of developed cities of Kosovo has created the need for adequate energy supply for heating spaces of collective building. Installation of cogeneration in TPP Kosovo B and the plan to develop such system in Kosova e Re TPP created opportunities for stable supply of thermal energy for a significant portion of citizens and businesses not only in Prishtina but also in cities in the vicinity of the power plants. This strategy supports the full utilization of thermal energy potential of TPP Kosova B and Kosova e Re for new thermal installations, as deemed cost-effective. Obsolete thermal systems in cities such as Gjakova, Mitrovica and Zveçan are in need of rehabilitation in all elements, taking into account the need for their expansion to include new and planned buildings. This strategy also supports the improvement of existing systems and expansion of their capacity. The study conducted by MED financing for construction of thermal power systems in some developed cities in Kosovo: Peja, Prizren, Gjilan and Ferizaj has shown that it is cost-effective to 32 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 develop them, thus this strategy supports such development, but with the involvement of private capital through public-private partnerships. To achieve the objective of increasing the existing capacity thermal systems and building new capacities the following measures are envisaged: 1. Expansion of TERMOKOS network, including expansion into neighboring municipalities of Prishtina and maximal use of co-generation capacities provided by TPP Kosova B and TPP Kosova e Re 2. Construction of thermal energy generation plant in the City’s DH in Gjakova and improvement of the existing network for maximal use of new planned capacity of thermal energy. 3. Upgrades of thermal energy systems in cities of Mitrovica and Zvecan 4. Institutional involvement for the development of the process, starting from the preparation of the required documentation including the tender dossier for the construction of thermal energy systems in larger municipalities of Kosovo (Peja, Prizren, Gjilan, Ferizaj); 5. Feasibility study on the use of existing systems for the provision of other products of thermal energy in addition to the one for heating spaces; Annex 5 shows the development projects of existing district heating systems (TERMOKOS and DH Gjakova), the main results of the study for central heating in Peja, Prizren, Gjilan and Ferizaj as well as a general description of the Project: Improvement of central heating in Kosovo through the implementation of the central heating system in municipalkities with a high heating potential approve by KKI21 . 6.4. OBJECTIVE 4. DEVELOPMENT OF NATURAL GAS INFRASTRUCTURE Some of the past dilemmas in terms of feasibility of connecting Kosovo with the international natural gas systems, since 2013, have been eliminated. The approval of the Trans Adriatic Pipeline (TAP) project 22 has created great opportunities for Kosovo. In addition to this possibility, being part of the Energy Community on the one hand, and having a convenient geographical position that enables interconnection of pipelines of other sources of natural gas, Kosovo is likely to ensure supply of natural gas from more than one direction. Development of natural gas infrastructure for a small market such as Kosovo represents a difficult task on one side, but being part of the Energy Community market is conducive to Kosovo’s, and this strategy fully considers the possible connection of Kosovo to the international natural gas network in the future ten-year period and supports policies and measures for the construction of natural gas infrastructure that contributes an increased diversification of energy sources, primarily for the purposes of industrial development. Annex 6 gives a description of data of the application for the Natural Gas project, common with the Republic of Albania (ALKOGAP) To achieve the objective of infrastructure development of natural gas, the following measures are envisaged. 1. Feasibility study for the construction of natural gas system infrastructure; 2. Drafting and implementing a master plan for gasification of Kosovo; 3. Development of secondary legislation to implement the law on natural gas, approved in June 2016; 21 Single Project Pipeline of Infrastructure approved by the National Investments established based on the Berlin Process for the Western Balkans Countries, WB6 22 http://www.tap-ag.com/; http://www.tap-ag.al/ 33 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 4. Establishment of the Transmission System Operator of natural gas; 5. Signing agreements necessary connection of Kosovo in the international natural gas networks. 6. Approval of required acts related to aspects of ensuring the right of property use, as needed for the pipeline and facilities; 6.5.OBJECTIVE 5. IMPROVING THE TARGETS OF ENERGY EFFICIENCY AND RENEWABLE SOURCES AND THE ENVIRONMENT AS PER THE OBLIGATIONS OF THE TREATY ESTABLISHING THE ENERGY COMMUNITY AND SAA. 6.5.1. Energy efficiency Kosovo, as a contractual party of the Energy Community and a signatory party of the Stabilization and Association Agreement, has assumed obligations that require a dedicated commitment of all its institutions to encourage energy efficiency. In addition to the implementation of measures envisaged in the National EE Plan 2010-2018 which is under implementation, Kosovo, similar to other contractual parties of the Energy Community, has committed that by March 30, 2017 (reviewed every 3 years) it will draft a long-term strategy for the mobilization of investments in the renovation of the stock of residential and commercial buildings, both public and private. = In order to reduce the demand for energy and acvhieve the objective to improve energy efficiency as per obligations of ECT and SAA, the following measures are envisaged: 1. Implementation of the proposed measures and the drafting of new measures under NEEAP 20102018; 2. Revision of the Energy Efficiency Law as per the Directive 27/2012/EC, bylaws and their implementation; 3. Establishment of the Energy Efficiency Fund; 4. Drafting of the Energy Efficiency Strategy, to be renewed every three years: 5. Adoption of Law on Energy Performance of Buildings (transposition of the EPBD directive) and relevant implementation regulations 6. Approval of the Energy Code for certification of buildings; 7. Development of programs on: o renovation of family houses; o energy renovation of collective residential buildings; o energy renovation of commercial buildings; o energy renovation of public buildings, o development of other co-financing programs for the Energy Efficiency Fund 6.5.2. Renewable energy sources Renewable Energy Sources (RES) comprise an important segment of the energy sector, which improves the security of energy supply, increases economic growth, diversifies sources of usable energy and reduces CO2 emissions thus protecting the environment. The use of such resources for energy generation is a long-term objective, which must take into account the obligations arising from the Energy Community Treaty and the SAA, related to energy. As a party to this Treaty, Kosovo is obliged to meet targets of the share of energy from renewable sources in gross final consumption of energy for the period up to 2020, pursuant to Directive 2009/28/EC and in accordance with Decision of the Council of Ministers of the Energy Community D/2012/04/MC-EnC. This share is in line with the required target of 25% which is projected to be completed by available resources: hydropower; solar energy; solid biomass and other forms of biomass; wind power, and biofuels used in transport for consumption. 34 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Development of RES projects in order to maximize their use in the economic development and environmental protection in the period covered by this strategy will be based on the economically and technically exploitable energy potential of Kosovo, from RES in Kosovo. In terms of long-term development perspective, the use of RES will be based on the opportunities offered by the development and advancement of technologies of each type of resource. In order to diversify energy sources and acvhieve the objective to improve energy efficiency and use of RES as per obligations of ECT and SAA, the following measures are envisaged: 1. Continued implementation of the Action Plan for Renewable Energy 2011-2020 and its revision by 2018 in order to achieve the target set at 25% for general end consumption, based on the strategic objectives defined in this strategy for new generation capacities from RES 2. Implementation of new EU policies to encourage RES 3. Establishment and functioning of One Stop Shops for RES. 4. Supporting generation projects for thermal energy systems using RES as fuel 6.5.3 Environmental protection Implementation of obligations arising from the Treaty establishing the Energy Community, which are reflected in the Stabilization and Association Agreement, represents one of the more complex and costly challenges. Construction of new generation capacities, rehabilitation or eventual reconstruction of existing ones, must be consistent with the requirements of European environmental directives. Drafting of national plans and programs for the reduction of environmental pollution from large combustion plants, such as thermal power plants and thermal generators, is a short-term priority. In order to improve the environmental conditions during energy activities and achieve the objective of implementation of international obligations under the ECT and SAA in the environmental field, the following measures are envisaged: 1. Completion and harmonization of legislation with the acquis on environmental aspects of energy activities and their implementation based on the dynamics, ensuring that the construction of new plants is harmonized as much as possible with security of supply policies in a more affordable fashion; 2. Approval of plans on reduction of emissions from large combustion plants under the requirements laid down by the Energy Community; 3. Decommissioning and dismantling of the gasification facilities, fertilizer, heating and other facilities that do not impede the normal operation of active units of TPP Kosova A, in accordance with the decision of the Government of the Republic of Kosovo, no. 04/156 “The use of lignite, in accordance with all environmental protection requirements (construction, rehabilitation and reconstruction of new power plants must meet environmental criteria as defined within the Energy Community which are a reflection of the EU criteria); 04/156. 4. Improvement of the environmental component in TPP Kosova A and Kosovo B and the surrounding area; Use of lignite, particularl for new generation capacities must be done in line with all EU requirements adopted by the Energy Community on environment ; CHAPTER VII NEXT STEPS FOR THE IMPLEMENTATION OF THE STRATEGY 35 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 For the implementation of the Energy Strategy of the Republic of Kosovo 2016-2025, the Energy Law requires MED to prepare a three-year implementation program, approved by the Government. The Implementation Program of the Energy Strategy shall be developed for the period 2016-2018. This document is developed separately after the approval of the Energy Strategy by the Assembly of Kosovo. The Program for the Implementation of the Strategy will group actions under each measure, indicating timelines of implementation, responsible institutions and supporters of the implementation of actions, time of the action and the overall cost of the plan for the period, as well as the source of funding. Monitoring of the implementation of the program will be conducted by MED, through regular annual reports. END OF DOCUMENT 36 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Republika e Kosovës Republika Kosova-Republic of Kosovo Qeveria –Vlada-Government MINISTRIA E ZHVILLIMIT EKONOMIK MINISTARSTVO EKONOMSKOG RAZVOJA MINISTRY OF ECONOMIC DEVELOPMENT ANNEXES TO THE ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Prishtinë July 2016 37 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 1. SITUATION IN THE ENERGY SECTOR 1.1. ELECTRIC ENERGY 1.1.1. Meeting the demand for energy and electric power The problem of electric energy supply in Kosovo originates from the intentional destruction of the electric energy system in all its elements from the occupying regime, especially in the last decade of the last century. There was no construction of electric energy generation capacities in Kosovo since 1984, except some minor hydro capacities which had no impact in solving the problem of electric energy security of supply. Currently most blocs of thermo power plants are at the end of their technical life cycle. Had there been a development a sustainable development of electric energy supply, practically all generation capacities of “Kosova A” PP should have been either decommissioned or rehabilitated by now (as was the case in many similar instances in South East Europe countries (SEE)). Despite all the problems and difficulties faced by the electric energy generation system, it had a constant growth, with an exception in 2014 (see the diagram below). ELECTRIC ENERGY DEMAND AND ITS COVERAGE konsumi prodhimi importi eksporti 7,000 ELECTRIC ENERGY (GWH) 6,000 5,000 4,000 3,000 2,000 1,000 0 2,835 1,913 3,105 3,312 2,569 921 779 1 236 2000 2001 3,541 3,908 4,259 4,283 3,999 3,997 4,584 4,944 5,275 4,527 4,333 5,506 5,584 5,467 5,862 5,399 5,167 5,314 5,520 5,037 4,798 4,894 5,570 5,503 3,483 3,152 3,220 627 315 484 553 280 192 2002 2003 2004 349 41 393 80 540 170 458 125 611 114 685 195 785 278 572 371 756 458 932 452 684 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 553 VITET Figure 1. Evolution of electric energy demand and its coverage In the Figure 2 hereunder, we have presented a history of evolution of maximum electric energy load (Peak) and electric energy consumption for the past thirty years (1985-2015) 38 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Figure 2. Evolution of electric energy maximum load (Peak) and consumption, over the past three decades Although there is an increase in the amount of generation year after year from the existing TPP-s and HEP-s, it is not an indicator of sustainable generation system or of sustainable electric energy security of supply. Operation with old capacities in need of rehabilitation makes the reliability of generation system unsustainable. Electric energy generation is faced with serious problems from the system’s technical security point of view, as a consequence of old and outdated devices; therefore, it is required to undertake measures as soon as possible. If we add to it the environmental problem that comes as a consequence of outdated generation technology in one hand, and international obligations that Kosovo has in reducing the environmental pollution as a consequence of electric energy production, on the other, the measures for improvement of generation conditions becomes even more immediate. This however should be done by taking into consideration the security of supply as well within the existing conditions of operation of generating capacities. The increasing demand for electric energy is covered by the production from two lignite based thermo power plants (TPP “Kosova A” and TPP “Kosova B”), which accounts for 97% of national electric energy production, from hydro power plants and imports and in case of inability to provide the supply, power cuts are applied. Over the years there were significant improvements in meeting the electric energy demand from the internal generation capacities. The electric energy imports ranged from 10-14% of the amount of energy needed to cover the electric energy demand. The electric energy production in 2000 was 1913 GWh while in 2015 it was 5503 GWh. The increase of production during this time period was 287.66%. The production growth trend continued from 2000 to 2013, while in 2014 there was a decrease in production, in comparison to the previous year, due to a mishap that occurred in “Kosova A” TPP 23. The demand for electric energy was mainly fulfilled by the national production and a part from imports. In situations of electro energy system overload, planned cuts were applied (According to the ABC plan). Cuts marked an increasing decrease in the recent years. Despite the fact that this plan was not abolished, it was not used by the public supplier (KESCO)24. Considering that Kosovo depends on electric energy imports, we have presented hereunder a diagram of electric energy import prices for period covering 2000-2015. 23 24 Annual reports of the ERO KESCO – Enterprise licensed for electric energy supply 39 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Çmimi mesatar i importit (€/MWh) 120 100 80 60 40 20 0 112.52 83.66 44.53 39.64 30.43 29.6 32.67 47.87 54.87 75.77 57.91 69.66 79.46 62.14 52.31 51.76 Figure 3. Evolution of imported energy price The energy import price changed constantly from 29.6 €/MWh in 2001. See figure 3. 25 From 2000 to 2015 538.25 million Euros were used for electric energy import. In some cases there was intervention by the government for subsidising imports. Since 2012 the import subsidies were terminated. After privatisation of the electric energy supply company, the cost of electric energy imports has decreased significantly, as a consequence of efficient procedures for purchasing electric energy. The biggest remaining problem in electric energy sector is achievement of generation adequacy, respectively coverage of the peak and energy reserves of the system regulatory power, in line with the ENTSO-E rules. During maximum system loads, the existing capacities cannot cover the Peak, while on the other hand the tertiary system reserve, which implies replacement of a bigger unit, in case of unplanned failure, cannot be ensured from existing generating capacities. This service is usually ensured from flexible unit (hydro or natural gas) which within minutes from the failure of the big unit can replace the lost capacity. According to operating rules of ENTSO-E, a regulatory zone is obliged to ensure at least 50% of regulatory reserve capacities (primary-secondary+tertiary) from its national generators, whereas the rest can be ensured from the market of subsidiary services. Currently, in case of unplanned unit failure load reduction is applied, for as long as the capacity of the lost unit is not ensured from the regional market, with the sole purpose of maintaining the electric energy system balance. During the regime of minimum load, there is a problem of energy surplus, during the night, which cannot be reduced due to technical characteristics of existing units TPP “Kosova A” and TPP “Kosova B”. Activities undertaken, in recent years with regards to integration of energy market between Kosovo and Albania, when finalised and implemented, will have a significant impact in improvement of conditions of operation of both electric energy systems. Following the completion of technical infrastructure of LFC project, KOSTT and OST (Albania) have signed an agreement for securing the secondary reserve with 25 MW capacity, from hydro units in Albania, which represents the first concrete step towards integration of both markets with optimal diversity of generators. 25 ERO Annual reports 40 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 1.1.2. Electric energy distribution and supply system Together with the growth in economy and wellbeing of citizens, the demand for electric energy marked a constant increase. The infrastructure capacities of the energy distribution system were unable to follow this increase of demand to the proper degree as a consequence of little investments in the distribution network in the past. Consequently, the electric energy distribution system is constantly overloaded, especially during the winter season. The following tables show the assets of distribution Transformation (kV/kV) Owner 35/10 KEDS 10(20)/0.4 KEDS 10/0.4 KEDS 6/0.4 KEDS Voltage (kV) Owner 35 kV KEDS 10(20) kV KEDS 10 kV KEDS 6 kV KEDS 3 kV KEDS 0.4 kV KEDS No. of Sub.St. No of TR 44 2,158 2,865 65 Aereal network (km) 361 1,146 4,584 42 3.5 16,598 Power (MVA) 90 632 2,251 780 2,865 868 65 9 Cable network (km) Total (km) 12 373 393 1,539 917 5,501 8 50 1.0 4.5 2,017 18,615 network.26 Table 1. Electric energy network distribution system lines Table 2. Transformers installed in the electric energy distribution system In May 2013, the electric energy distribution and supply system was transferred to private ownership. At the end of 2014 the process of legal unbundling of DSO from the supply activity was finished. In the recent years, especially after the privatisation of the distribution network, many investments were made in the distribution network (around 20 million per year). Investments are continuing based on projects planned by DSO. 26 Source: KEDS 41 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Regardless of improvements in recent years, technical and commercial losses in 2015 were around 31.8% 27 . This was expected because it takes some time until network investments give their results. Due to inability to control the distribution and supply system, certain amount of energy in several municipalities in the north of Kosovo namely around 5% of the entire amount of electric energy with which the distribution system is charged, remains unbilled. The graphs in the following figure presents the situation of the supply and distribution system from the aspect of both technical and non-technical loses. % OF TECHNICAL AND COMERCIAL LOSSESS LOSSES IN THE DISTRIBUTION SYSTEM 60 50 48.1 Humbjet teknike (%) 42.82 Humbjet komerciale (%) 42.8 41.22 40 Humbjet Totale (%) 38.15 36.69 35.54 33.5 31.8 2011 2012 2013 2014 2015 30 20 10 0 2007 2008 2009 2010 Figure 4: Technical and non-technical losses 2007-201528 As indicated in the indicators presented in the figure above in recent years there have been improvements, but a lot more remains to be done with regards to further reduction of technical and commercial losses and establishing control, over the entire distribution network system and electric energy supply. A positive indicator is the fact that the public supplier (KESCO) managed to constantly improve the performance with respect to collection of the amount of billed energy. The diagram hereunder shows the development with respect to collection29. Electric Energy Collection (%) 120 100 80 74.61 75.52 73.77 2006 2007 2008 80.42 86.39 89.68 89.23 88.67 2010 2011 2012 2013 95.93 95 2014 2015 60 40 20 0 2009 Figure 5. Evolution of collection of billed electric energy 27 Source: KEDS Source: KEDS 29 Source: KESCO 28 42 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 1.2. THERMAL ENERGY SYSTEM30 The district heating sector in Kosovo is comprised of four systems: DH Termokos – Prishtina, DH Gjakova, DH Termomit – Mitrovica and Zveqan. This sector has a pretty limited spread in the national level, and meets around 3 – 5% of the overall demand for heating of premises in Kosovo. 1.2.1. Developments in DH “Termokos” – cogeneration project The most important development in 2015 is completion of the cogeneration project TPP “Kosova B” – DH “Termokos”, as well as continuation of other stages of rehabilitation of network and thermal sub-stations. This project was developed through WBIF whereas the leading financial institution was the German Bank for Development (KfW). Through this project, DH “Termokos” is enabled to get a supply with thermal energy from TPP “Kosova B” with overall nominal capacity of 140 MW TH (2 x 70 MWTH). The financing of this project was enabled by donations from the European Commission, the German Government, Governments of Sweden and Luxemburg, Government of Kosovo and Pristina Municipality. Out of the total mount of the project, 86.54% are donations and 13.46% soft loan. In May 2015 the cogeneration equipment was also connected to the B2 generator of TPP “Kosova B” with a nominal capacity of 70 MW TH, whereby the security of operation and supply to consumers with thermal energy was increased. During this year, stage 3 and 4 of the project was is in the process of implementation: - Rehabilitation and modernisation of 50 substations of thermal energy in the distribution network, which apart from installation of mechanical and electrical equipment, also included installation of Remote Monitoring and Controlling System (PSC/SCADA) in these substations and their integration with the central system (PSC/SCADA), which enables reception of data electronically and remote monitoring of sub-stations. - Rehabilitation of the primary distribution network – installation of new pre-insulated pipelines with DN 100 – DN 450 [mm] dimension, in a length of around 5 km. - Likewise, within a short time period, it is planned to expand the distribution system, in order to enable connection of other parts of Prishtina City which are currently not covered by the district heating supply service, to the distribution network. In the following table we have presented the situation of billing and collection from “Termokos” Enterprise Table 3. Some indicators of District Heating Plant “Termokos” Billing and collection in DH Termokos –season 2014/2015 Heating season Billing with Collection Collection Heating surface (m2) 2014/2015 VAT (€) (€) rate (%) 660,444 2,141,448 835,338 39.01 Households Commercial 458,569 2,413,576 1,749,082 72.47 and Institutions 1,119,013 4,555,024 2,584,420 56.74 Total 1.2.2. Developments in the DH of Gjakova – The project of substitution of fuel and cogeneration 30 The situation of the thermal energy sector for 2014/2015 season was described based on the annual report of the ERO 2015 43 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 With regards to DH of Gjakova, initially it should be emphasised that it did not operate at all during 2014/2015 season due to financial difficulties that disallowed it to get a supply of fuel (mazut), which consequently did not allow for production and supply of consumers with thermal energy. Nevertheless, thanks to subsidies from the Kosovo budget and financial means from Gjakova Municipality, the DH Gjakova managed to improve its financial situation and at the end of 2015, it started with production and supply of consumers with thermal energy for 2015/2016 season. With regards to the project for substitution of fuel and rehabilitation of the district heating system of the DH Gjakova, it is worth mentioning that, in the beginning of 2015 the feasibility study was conducted together with the social and environmental impact assessment (SEIA). Throughout this year, there was a coordination of efforts in order to perform other arrangements related to financial support for implementation of the project as well as other issues of institutional and legal ownership nature. With regards to financial support, these efforts were crowned in October 2015 with the approval by the European Commission – Office in Kosovo of the support for the project with a donation in the amount of around € 12 million. The key components of the project for substitution of fuel and rehabilitation of the DH Gjakova system are: Substitution of mazut burners with biomass burners, which includes 2 production units: one with capacity of 8 MWTH solely for production of thermal energy, whereas the second unit is foreseen to be a co-generation unit for generating both thermal and electric energy with the capacity of 8 MWTH and 1.57 MWEL. It also includes overall revamp of equipment for production of thermal energy – heating facility; Rehabilitation of distribution network – more concretely rehabilitation of the northern part of the network, which amongst other things includes replacement of around 3.3 km of existing pipelines with pre-insulated pipelines; Complete rehabilitation of 20 thermal substations identified as a priority and more important. 1.3. RENEWABLE ENERGY SOURCES Renewable Energy Sources (RES) represent an important energy source available in Kosovo, with an a potential that is still untapped sufficiently. The use of such sources for energy production represents a long term objective for implementation of three objectives of energy policies of the country, such as: support for the overall economic development; increase of the security of energy supply and protection of environment. Within the function of these objectives, there is a need to apply fiscal and financial incentive measures for all types of RES and the green certificate system. In order to incentivise the use of renewable energy sources, Kosovo established a feed-in tariff system for water, wind, solar and biomass sources including biogas. These measures of incentivising policies towards the RES aim to meet the requirements of respective European Union (EU) directives, whose transposition and implementation is done under the monitoring of the Energy Community Secretariat. Renewable energy sources are especially important for heating purposes, respectively production of thermal energy. As such, they have become a part of Heating Strategy. Considering that there is a need to minimise the use of wet lignite and unsustainable use of wood for heating purposes, the use of solar energy, municipal waste and waste wood is seen as promising source for heating premises and sanitary water. The development policies of forestry sector drafted and implemented by the Ministry of Agriculture, Forestry and Rural Development gave a support to greater use of renewable energy sources. Such policies continued to consider wood as an important source of thermal energy. Due to this reason, the Forestry 44 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Development Strategy (2010-2020), gave a proper priority to the support for using systems and methods leading to a better use of forest fund for production of energy. The energy sector laws, especially the Law on Energy, constantly treated Renewable Energy Sources with respect to its promotion, optimisation and use, including determination of annual and long-term goals of energy generation from such resources. With the view in supporting and promoting the use of Renewable Energy Sources, the Ministry of Economic Development drafted a ten-year action plan for RES, as a policy document for this important energy sector. In line with the legal obligations, and those deriving from the Energy Community Treaty (ECT), the MED has determined the RES goals for period covering 2011-2020, by taking into consideration the opportunities and potentials of Renewable Energy Sources available in Kosovo. Fulfilment of such goals is monitored by the Ministry of Economic Development, which is also responsible for reporting on the progress achieved to the Energy Community Secretariat (ECS) in Vienna. MED also monitored the secondary legislation in relation to specific measures for promotion of greater use of RES. An important role in promotion of Renewable Energy Sources is also played by the Transmission and Distribution System Operators. They are bound by the Law to prioritise energy produced by renewable energy sources, according to limits specified in the Network Code. The system operators determine and publish rules related to the costs for the necessary technical adaptation for integration of the RES into the system. Such rules are approved by the Energy Regulator Office (ERO). ERO also ensures that transmission and distribution tariffs for the producers of RES and non-discriminatory, especially those from remote regions. ERO is responsible for issuing certificates of origin for electric energy produced from RES, which is a responsibility defined in the Law on Electric Energy. One incentive for Renewable Energy Sources is the legal obligation in the part of the public supplier of electric energy to purchase the entire amount of energy produced from the RES from producers under a regulated tariff, determined by the ERO through its determined methodology, which takes into consideration compensation from the public supplier of additional costs of purchasing electric energy from renewable energy sources. ERO is responsible under the law to conduct regulatory activities in the field of Renewable Energy Sources. It develops the methodology on regulated tariffs and issues licenses for energy activities and authorisations for construction of energy capacities from renewable energy sources. Under the Law on Central Heating, the ERO is also obliged to issue certificates of origin for thermal energy produced from renewable energy sources, or the energy produced in a co-generation process of generation of electric energy and thermal energy Thermal energy for which the certificate of origin was issued, has precedence for purchase from the public supplier in comparison to the rest of the energy for which no certificate of origin was issued. Based on that, the producer of thermal energy has the right to issue and sell green certificates. The support schemes for Renewable Energy Sources In order to meet the objectives for energy from renewable energy sources, the ERO issues special regulation to determine the level of necessary energy capacities, as well as other requirements and procedures for acceptance of the support scheme, the rights and obligations of producers of electric energy from renewable sources for which the certificate of origin was issued and accepted under the 45 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 support scheme, including the rights and obligations of the public supplier in relation to electric energy for which certificate of origin was issued, rights and obligations of KOSTT, financing of the support scheme, integration of electric energy produced from renewable energy sources into the electric energy system. Feed-in tariffs and the duration of transaction agreement for electric energy from renewable energy sources The primary sources of energy from RES used for generating electric energy acceptable under the support scheme are: water, wind, biomass and photovoltaic. The RES projects with capacities within the planned goals, are supported under the feed in tariff scheme which is determined by the Energy Regulatory Office. The applied feed- in tariff is different for different technologies, as following: - water energy (small hydro power plants): 67,3 Euros/MWh; - wind energy: 85 Euros/MWh; - biomass energy 71.3 Euros/MWh and photovoltaic energy 136.4 Euros/MWh. During the review of the support scheme of feed-in tariffs for the energy from water and wind, in 2016, the Energy Regulatory Office increased the feed-in tariffs for the water energy from 63.3 to 67.3 Euro/MWh, whereas for the wind energy the deadline for its transaction was extended from 10 to 12 years. The 12 year deadline of energy transaction agreement also applies to photovoltaic, whereas for the small HPP is still 10 years. Studies and assessments of Renewable Energy Sources potential As the first step for incentivising the use of renewable energy sources for generation of energy, the Government of the Republic of Kosovo conducted an assessment of the potential of available sources. In this regard, in 2006, 2009 and 2010, MED conducted preliminary studies and assessments on the countries potential for small HPP. Development of the HPP is foreseen to be done with investment of private capital. Acording to these studies, the water energy potential was assessed to be around 130 MW of new installed capacities with annual average production of 621 GWh. During 2008, the potential of solar, wind, biomass and geothermal energy was assessed with the assistance of consultants from the Danish company COWI. Goals of Renewable Energy Sources There are three HPP-s in Kosovo as distribution hydro power plants: HPP Dikanci, , HPP Radavci and HPP Burimi. Whereas HPP Lumbardhi was connected to the transmission network. There HPP-s were rehabilitated during 2009-2010 and increased their production since they were given with concession by their title holder, the Kosovo Electro-Energy Corporation. The HPP Lumbardhi was rehabilitated and commissioned in 2005 by a company which will be renting it 20+20 years. The installed capacity of this HPP is 8.08 MW. HPP Dikanci was rented and made operational in 2010, whereas its installed capacities have increased to 1 MW after its revamp. The HPP Radavci was rehabilitated in 2010 from the company that took it with concession. The installed capacities of this HPP were also increased to 0.9 MW. 46 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 HPP Burimi was taken with concession and its capacity was increased from 0.56 MW to 0.86 MW. HPP Ujmani, also contributes in the electric system of Kosovo with installed capacity of 35 MW and annual production of around 88-90 GWh. This HPP is owned by the Hidrosistemi Iber-Lepenc. In 2009, the first capacities of wind energy were installed with capacity of 1.35 MW in the Golesh hill in the vicinity of Prishtina. In the following period ERO received other requests from private companies for investments in wind energy capacities in Artana, Dardana, Shtime, Rahovec (Zatriq), Suhareka (Budakovë) and Drenas. Solar collectors for heating of sanitary water have been installed in series of buildings such as the University Clinical Centre of Kosovo and the Student Centre in Pristina, with financing from the state budget (during 200-2009), and in three other public buildings-parts of the project for implementation energy efficiency, with financing of European Commission (during 2010). During 2015 a capacity of 102 kv of photovoltaic energy was installed in the vicinity of Klina for commercial purposes, and HPP Brodi II with the capacity of 3.89 MW was commissioned. Whereas in the beginning of 2016, the construction of two new small HPP-s was finished: HPP Lumbardhi II with a capacity of (9.2+8.4) MW and HPP Albaniku III with a capacity of 4.3 MW. In the meantime, as a result of private investors interest for small HPP-s, ERO issued the final permits of authorisation for 76 MW; preliminary permits of authorisation for 89.54 MW, and is in the process of reviewing requests for authorisation of 513 MW of new capacities. Similar interest of private investors was also with regards to wind energy, where as a result the ERO issued preliminary authorisation permits for a capacity of 87.75 MW and is in the process of authorisation for additional 51 MW. The National Renewable Energy Action Plan Kosovo is a member of the Energy Community Treaty, therefore like all other member states, it is obliged to meet the energy targets for RES, based on the Decision of the Council of Ministers of Energy Community D/2012/04/MC-EnC for implementation of Directive 2009/28/EC, therefore it drafted and approved the mandatory target for RES by 2020. This target is participation with 25% of energy from RES in the final gross consumption of energy. A higher target (29.47%) was set by the Administrative Instruction for the Renewable Energy Sources Target 01/2013. The RES targets were planned to be achieved from photovoltaic energy; solid biomass; wind; existing small HPP-s; new small and big HPP-s. With respect to electric energy and the foreseen capacities, in 2020, according to the promoted target, the plan is to install 240 MW of energy from TPPs. Whereas in terms of other types of RES, the wind energy is foreseen to have installed capacity of 150 MW; photovoltaic energy 10 MW and energy from biomass 14 MW. Installed capacities of thermal energy by 2020 are expected to be as following: Geothermal energy 10 MW; Solar energy 70 MW and energy from fire wood biomass 264.5 ktoe. The national renewable energy action plan (NREAP) (2011-2020) with its targets and measures that are to be undertaken for their fulfilment by 2020 represents the overarching policy of the government for incentivising the use of RES in Kosovo. The NREAP was prepared based on the model compiled by the European Commission (EC) and presented in the Commission Decision 2009/584/EC. It meets all the requirements of Directive 2009/28/EC adopted pursuant to the Decision of the Council of Ministers of the Energy Community D/2012/04/MC-EnC for implementation of Directive 2009/28/EC and amendment of Article 20 of the Energy Community Treaty. 47 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 The energy targets determined under the AI 01/2013 and decided under the NREAP have been determined through a Decision of the Energy Community Council of Ministers D/2012/04/MC-EnC for implementation of Directive 2009/28/EC. They are an estimation of RES energy participation in the consumption of electric energy, heating and transportation. Nevertheless, for promotional purposes, Kosovo has determined another high target of the RES energy which corresponds with participation of this energy with 29.47% in the final gross consumption of energy by 2020. In the future for purposes of meeting the RES energy targets beyond 2020, it is expected that different flexible state mechanisms of cooperation between states will be used for RES, such as statistical transfer and joint support schemes. In line with the agenda for operation of the Task Force, respectively the coordination group for RES within the Energy Community Secretariat, where Kosovo is part of, the first report related to the implementation of the NREAP and fulfilment of the RES energy targets, was presented at the end of 2014. If other biennial reports for implementation of this NREAP and progress in fulfilment of energy targets suggests that Kosovo will not be able to fulfil the mandatory targets only through national generation of energy, we should look into the possibility of undertaking adequate steps in using the additional mechanisms. 1.4. ENERGY EFFICIENCY (EE) The feasibility study on Energy Efficiency and measures of its implementation in public buildings in Kosovo, implemented with the support of the world Bank, has identified a potential in saving energy in: • Government buildings at the central level: 4.28 ktoe (54% of energy) • The local/municipal level: 4.28 ktoe (23% of energy) • Total electric energy consumption Q/L: 8.56ktoe / 99.55 Gwh • Public Enterprises: 0.774 ktoe • Rented buildings: 0.274 ktoe • Sub-stations: 1.15 ktoe • TOTAL = (8.56+2,17) ktoe= 10.731 ktoe/125 Gwh Note: The significantly big potential for implementation of EE measures, not only energy savings but also improvement of quality of life for citizens, as well as creation of new jobs and development of local businesses in the field of EE, is an indicator of the importance of heaving a Strategy that mainly focuses on strategic and investment planning in the field of energy efficiency that would be in line with the European strategic targets and concepts deriving from EU Acquis Communautaire. Current activities and achievements based on investments in the field of EE in all energy sectors – both the transformed and final. The achievements have been described and reported at the Energy Community Secretariat in Vienna according to the NEEAP1 (2010-2018), and those that are on-going from NEEAP2 (2013-2015), whereas the projected ones will be covered in NEEAP 3 (2016-2018). The data and predictions presented hereunder show the fulfilment of the savings targets based on planned measures and those being planed currently. Assumptions/projections of targets for saving primary energy (the energy transformation sector): - A total of long term energy savings by 2017/18 (TPP A/TPP B) for each EE measure o Total of energy savings for production of lignite from Plan 2: 1.770 (TPP A) + 0.540 (TPPB) = 2.31 GWh/annually = 0.199 ktoe/annually o Total of energy savings for production of lignite from Plan 3: Are assumed to be higher that foreseen under Plan 2, since we are not dealing with rehabilitation of existing excavators but their replacement with new ones. o Total of energy savings for production of electric energy from Plan 2: 48 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 146 + 264 + 3.2 + 6.96 + 25.6 + 37 + 104 + 155 = 741.76 GWh/annually = 63.78 ktoe/ annually o Total of energy savings for production of electric energy from Plan 3: 231 + 314 + 5.09 + 8.414 + 6.29 + 1.55 + 4.06 + 5.86 + 246 = 822.26 GWh/ annually = 77.353 ktoe/ annually o Total of targets for increasing of capacities for electric energy generation from Plan 2: 25 + 25 + 20 = 70 MW o Total of targets for increasing of capacities for electric energy generation from Plan 3: 25 25 + 34 = 74 MW - Targets of EE savings for the electric energy transmission system from Plan 2: Reduction of losses for 0.06 % of the overall energy demand as a result of implementation of projects until 2016: 467.67 ktoe x 0.06% = 28.06 ktoe respectively 326.34 GWh. - Special energy efficiency measures and targeted projections have been included in the following tables for each energy sector throughout 2016-2018. Planned and achieved energy savings The savings target determined under the first NEEAP (31.00 ktoe) has been met – 31.915 ktoe. Preliminary assessments indicate that energy savings achieved during the first mid-term period (2010012) are even higher than the reported ones, however due to lack of statistical data, energy savings cannot me assessed and reported accurately. Energy savings achieved in the sectors of transport and industry, have not been assessed at all in the first NEEAP. The national indicative target and its achievement (Table below) Table 4. EE targets National indicative target for 2018 The middle target for 2012 Division of targets according to sectors Households (ktoe) Services (ktoe) Industry (ktoe)** Transport (ktoe) 91.89 ktoe 31.00 ktoe Rough estimate of Energy savings in Sector target energy savings in 2012 2018 From From Total Total 2012 2018 measures measures (TD) (TD) (BU) (BU) 12.40 30.64 28.05 ktoe 46.98 9.30 12.26 3.865 ktoe 18,91 It was not 7.905 24.84 14.00 assessed It was not 1.395 24.15 12.00 assessed 31.00 91.89 31.925 ktoe 91.89 ktoe 360.53 1068.68 371.17 GWh 1068.68 GWh Total (equivalent units): ktoe Total (GWh): Percentage (%)(compared to 3% 9% referent consumption ESD) *The fields highlighted in grey are from first NEEAP **Agriculture sector was included in the industry sector 3.1 % 9.00% Note: In the first NEEAP there was no national objective for buildings with almost zero energy consumption. 49 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Energy efficiency in Kosovo, alongside the need and efforts to ensure sufficient energy from production from existing thermo power plants and other alternative sources, is considered by the Kosovo Government as essential component of strategic and economic planning and development of Kosovo. In the field of EE, important policy-programmatic, legal and institutional steps for promotion of EE were undertaken. The Kosovo EE Agency and the Certification Commission of Energy Auditors and Managers were established. Likewise, considerable investments in improvement of EE were made. The legal framework and EE projects implemented/on-going in Kosovo. In this instance it is worth emphasising that apart from basic laws of the energy sector, we now have the Law on Energy Efficiency and series of different Administrative Instructions (AI) and regulations: Administrative instruction on promotion of energy efficiency by the end user and energy services; AI on labelling equipment that use energy; AI on energy audit; Technical regulation for energy audit; Regulation on internal organisation of the Kosovo Energy Efficiency Agency; Regulation on establishment of the Commission for Certification of Energy Auditors and Managers; Strategic Plans in the field of Energy Efficiency National Energy Efficiency Action Plan of the Republic of Kosovo (NEEAP) 2010-2018, was approved and projects for energy savings in the range of 9% or around 92 ktoe, by 2018; The first mid-term National Energy Efficiency Action Plan of the Republic of Kosovo (NEEAP) 2010-2012, was approved and projects for energy savings of 3% or around 31 ktoe by 2012; The first report on the National Energy Efficiency Action Plan of Kosovo, indicates that the target was achieved by 3.1% from the total projected for these three years 3% or 31.925 ktoe from the total of 31 ktoe projected for three years. The target was exceeded with a small percentage; Drafting and approval of the second mid-term National Energy Efficiency Action Plan (NEEAP) 2013-2015, which projected savings in the range of 3% or around 31ktoe; So far, 18 municipalities have drafted Municipal EE Plans 2014-2020 which have been approved by their municipal assemblies. Projects financed by the BRK: Energy audit of public service buildings, for 2011-2012-2013-2014-2015-2016, € 144,000.00 every year €; Public campaign on Energy Efficiency and Renewable Energy Sources (RES), for 2011-20122013-2014-2015-2016, €50,000.00 per year. Projects financed by donors/loans: Oversight and monitoring, verification and assessment of energy efficiency measures in schools and hospitals in Kosovo (financed by the European Commission, in the amount of 15.6 million euros. The project includes 63 schools and 2 hospitals. Study and implementation of energy efficiency measures in public buildings-central level (financed by the WBIF/WB. The amount of financing $31 M. Negotiations between MED-MFWB have ended in May 2014 whereas in June the WB Board approved the loan. After signing the agreement between MF and WB, the project was ratified by the Assembly of Kosovo. The project started to be implemented. Implementation of energy efficiency in public buildings – municipal level, financed by WBIF/KfW. Amount of financing 7.500.000,00 Euros. Support to private and residential sector for undertaking EE measures, financed by EBRD, the value of financing is 12M. (special emphasis was put on the private sector (Small and medium enterprises (SME), where the first contracts with the commercial bank TEB were already signed (amount 5m€) as well as “Kreditimi Rural i Kosovës” (KRK) (amount € 1.5M). The project is in the implementation stage. 50 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Several projects for promotion of EE were developed through the UNDP, by helping two municipalities draft their municipal EE plans 2014-2020 as well as concrete measures in public lighting in municipalities. Being a signatory party to the Energy Community Treaty, Kosovo takes active part in the meetings of the Energy Community in Vienna. It takes active part in the coordination group on EE, by approximating its legislation o the respective EU directives. All these activities, plans and measures developed or being developed, are giving significant effects in reduction of consumption and the need for import of energy, and give a possibility for better strategic planning of energy and more effective implementation policies. Nevertheless, this is only the beginning of an adequate journey, and a lot more work remains to be done, because the potential for implementation of energy efficiency in Kosovo is great, alongside the need for saving and improvement of quality of life of citizens in Kosovo, first of all in the residential sector. The following table gives a summary of data for all three EE mid-term action plans. Table 5. Summary of data for all three EE mid-term action plans 1.5. ENVIRONMENTL IMPACT FROM ENERGY GENERATION ACTIVITIES31 31 The material was taken from the report on environmental situation in KEK which is an official document published by KEK annually. 51 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 It is widely known that thermo power plants have an impact in pollution of air t the local, regional and global level. Thus, the impact of pollution in the local level includes several tens of kilometres from the source, which is known as local impact in the air quality. In this case, the air pollutant’s concentration is compared against the air quality standards determined through criteria. We are referring to increase of concentration of SO2, NOx, CO, organic gases, particles, heavy metals, poisonous organic composition etc. Thermo power plants emit huge amounts of nitrogen and sulphide oxides (NOx dhe SOx). These are pollutants which through chemical transformation in the environment turn to sulphates and nitrates, which form the so called secondary particles. Secondary particles are responsible for the increase of concentration of particles in the regional level, and as such are responsible for regional pollution with PM10 and especially with PM2.5. The regional impact is connected with acidification, photo oxidation, eutrophication (NOx, NH3) and increased concentration of over-earth ozone. Likewise the pollution of ozone is also linked in the regional level, because the ozone and ozone precursors such as the NOx, are subjected to transfer in bigger distances. The impact in the global level mainly from thermos plants is related to the impact of greenhouse gas emissions, namely emissions of CO2, CH4, N2O, CFC. Small amounts of other materials are also emitted, such as heavy metals, hydrogen chlorides and hydrogen fluorides, un-burnt carbohydrates, unstable organic non-methane components. CO2 is a greenhouse gas with global impact in climate and as such it requires a special treatment. The “Kosova B” TPP contains analysers for measurement of gas and dust emissions. In the KEK thermo power plants emission of pollutants in the environment is higher that the allowed emission lines due to inadequate projection designs of electrostatic precipitators, and lack of plants for reduction of pollutants such as NOx dhe SO2, high concentration of inorganic materials of lignite and other problems during the burning process. In “Kosova A” TPP (Unit A3, A4 and A5) we measure the emission of particles and calculate the emission of gasses. Dust (particle) emissions: In thermos power plants the exhaust gases go through electrostatic precipitator where the dust particles are separated. Then gases go through the chimney, where the amount of flying ash is further reduced before being released to the environment. Other emissions in the air are mainly the so called mobile emissions, by referring to local emission of dust, by-products of burning (secondary products), during transportation and so on. It should be emphasised that emission of particles in “Kosova B” TPP is not in line with strict standards deriving from Directive 2001/80/EU which determines the limits of dust emission 50(mg/Nm3). After installation of electrostatic precipitators in “Kosova A” TPP and operation with design that ensures emission of particulars under the foreseen criteria, we can conclude that a significant environmental improvement was done in this power plant. Emission of Carbon Dioxide. Carbon dioxide is a significant factor with impact in global warming. Emission of CO2 is proportional with the content of carbon in fuels and quality of burnt fuels. There is no commercially available method for capturing CO2 from the discharge source and the best option for reducing its emission is to increase the efficiency of equipment and rational burn of fuels. Carbon Dioxide emission in “Kosova A” TPP is based in calculations according to the quality of lignite and power of blocks based on the stehiometric ratio of chemical reaction, while in “Kosova B” it is measured. Emission of Carbon Monoxide: the burning process is followed by emission of monoxide carbon. Carbon Monoxide (CO) is always present as transitional product in the burning process especially under the conditions of sub-stoicometric burning. The burning process is followed by carbon monoxide emission. Power plants always try to reduce formation of the CO, because CO is an indicator of dangerous corrosive and un-burnable fuel, which is an indicator of reduced efficiency. Such emission causes increase of fuel consumption and is an indicator of low efficiency of power plant. Thus the emission of CO is a consequence of bad and incomplete burning process. With coal fuelled thermo power plants, CO and NOx act with same relationship. If we are to reduce the NOx emissions, the amount of air supplied in the tank should be reduced, in which case the production of CO increases. Thermo power plants should maintain the balance of these two parameters of emissions, in order to preserve the allowed limits. In the “Kosova B” TPP the emission of CO is measured whereas in Kosova A it is not. 52 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Emissions of SOx: in thermo plants SOx is emitted when the coal burns, due to the presence of sulphur. Most of sulphur oxides is in the form of sulphur dioxide (SO2); the metal acts as catalyst, whereas 1÷3 (%) of sulphur is oxidized in sulphur trioxides (SO3). SOx is the common denominator for SO2 and SO3 emissions, thus, SOx is mainly emission of SO2. The sulphur dioxide emission (SO2) is based in the composition of SO (organic Sulphur) in lignite as well as alcalite character of lignite respectively self desulphuration that occurs within the furnace. After the burn, a part of sulphur ends up as ash and scum SO3, and a part of it is transferred with exhausting gases up to the electrostatic filter, and finally (the remaining part) through the chimney into the atmosphere. Neither Kosova A thermo plant nor Kosova B have installed De-SO2 (system for desulphuration of exhausting gases). In the Kosova A TPP the SO2 is calculated while in “Kosova B” they are measured. NOx emissions: The reason for NOx emissions is the content of nitrogen in lignite and feeding air. The product of burning fossil components is nitrogen oxide in the form of nitrogen monoxide (NO), Nitrogen Dioxide (NO2) and nitrogen suboxide (N2O). Emission of NOx is caused from burning of nitrogen which is contained in lignite and from the presence of nitrogen in the air. When the lignite burns the NO is mainly created, and production of NO2 comprises some percentages of total volume of NOx. The amount of N2O is very small. The nitrogen oxides are formed from the chemical reaction of nitrogen and oxygen dissociated from the air, which is conducted in the flame. Thus the formation of NOx occurs mainly through the following mechanisms: - As a result of reaction between oxygen and nitrogen from air (thermal NOx), and - Nitrogen contained in the fuel. In case of lignite, it is assumed, based on different sources, that 80% of nitrogen oxides will be created from nitrogen contained in the fuel, and only 20% from the nitrogen in the air. For oxidation of nitrogen, it is necessary to have a certain value of temperature in the burner and a certain amount of oxygen. By undertaking primary measures in the burner, a satisfactory reduction of nitrogen oxides emissions is achieved in lignite burning thermo plants, such as with burners with less NOx and other good techniques available (BAT). In the Kosova A and Kosova B TPP-s there are no methods or techniques used for reduction of NOx emissions. In “Kosova A” NOx emissions are calculated whereas in “Kosova B” they are measured. Heavy metals: Lignite contains heavy metals and other elements. Despite small concentrations, they can cause harm to the environment and human health. Most heavy metals (As, Cd, Cr, Cu, Hg, Ni, Pb, Se, Zn, V) are released as components (e,g. oxides, chlorides etc.) bound with the particles. Only Hg and Se are partially present in the stage of steaming. Mercury (Hg) is a heavy metal that causes the biggest problems, with respect to emission from the coal burning process. A part of mercury and lignite stops in the stage of steaming, which means that it is not condensed in the surface of ash particles, therefore its removal by the device for controlling emission of particles fluctuates very much. Most heavy metals are bound with the flying ash in working temperatures of burner equipment. The situation of environmental pollutants was presented in Table 6. TPP Kosova Electric Energy MWh) 2015 2014 % Dust (mg/Nm3) 2015 2014 % TPP KA3 925997 984471 -5.94 52.9 59.2 TPP KA4 773348 403998 91.42 39 53 TPP KA5 357335 249418 43.27 33 54 TPP KA TPP KB1 TPP KB2 2056680 1986124 1935890 1637883 1597707 2048927 25.57 24.31 -5.52 44 57 SO2(mg/Nm3) 2015 2014 % 10.64 26.42 38.89 22.81 53 282 417 281 392 260 424 289 418 32.37 28.32 38.68 30.86 Nox(mg/Nm3) 2015 2014 % Co2(mg/Nm3) 2015 2014 % 708 713 0.70 257.66 263.16 749 717 4.46 260.71 263.29 724 715 1.26 260.97 264.95 725 714 1.54 259.67 262.91 2.09 0.98 1.50 1.23 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 TPP KB EU requirements* 3922014 3646634 7.55 645 860 -25 327 50 511 -36 821 400 814 0.86 220.7 216.04 500 Table 6. Emissions released from thermo power plants in 2015 and 2014. 1.6. COMPARION OF THE MAIN ENERGY INDICATORS WITH COUNTRIES IN SOUTH EAST EUROPE AND SOME EU MEMBER STATES Dependency on electric energy imports32 In Figure 6. We have presented a comparison of countries in the region and some EU member states with respect to their dependency on electric energy imports. Dependency on imports (%) 70.0 60.0 50.0 40.0 62.8 30.0 20.0 10.0 0.0 9.9 25.0 23.0 10.9 50.4 39.5 8.9 4.8 33.0 13.4 9.8 6.5 2.2 Figure 6. Comparison of dependency in electric energy imports All countries in the South East Europe depend on electric energy imports 33 . Kosovo, in comparison with other countries is not so dependent on imports, however this should be taken with reserves in terms of sustainability, because its outdated generating capacities do not generate long term 32 33 IEA oficial data from 2013 IEA data for 2013 (www.iea.org) 54 2.16 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 security. The electric energy generation capacities in Kosovo are more unsustainable in comparison to capacities of other countries. Comparison of net imports of electric energy GWh 50000 40000 30000 20000 10000 0 -10000 -20000 -30000 -40000 -50000 -60000 Figure 7. Net imports (Import-Export) (GWh) Share of sectors in the total of energy consumption of all types. The percentage of share of economic sectors in the final consumption of energy represents a qualitative indicator. The following diagram indicators represent comparative data on the distribution of final consumption of energy in the SEE countries34. The household and transportation sectors are the biggest consumers of energy in all SEE countries. In Kosovo and Montenegro the household sector represents the biggest consumer of energy. Participation of industry in the final consumption in Macedonia is 32% and in Albania this participation is only 13% while in Kosovo is 21%. 34 IEA official data from 2013(www.iea.org) 55 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Comparison of energy consumption in SEE countries 45 40 35 30 25 20 15 10 39 40 38 33 28 28 25 5 21 9 10 9 0 Amviseria 12 13 Shqiperia 26 31 27 24 22 13 4 Sherbimet Kosova 32 28 27 25 2 3 2 1 1 0 Industria Serbia Bujqesia Maqedonia Transporti Mali i zi 0 1 0 0 1 0 3 7 6 3 3 2 Tjera/ Jo te specifikuara Konsumi jo energjetik Bosnia dhe Hercegovina Figure 8. Comparison of share of energy sectors in the final energy consumption in SEE countries While some countries in the region such as Macedonia, Serbia and Bosnia and Herzegovina have a diversity of supply with different products of energy for fulfilling the main demand of main sectors of economy, Kosovo, Albania and Montenegro are quire restricted in this respect. She share of oil products was not presented since its use is in most cases for transportation purposes in all these countries35. Share of different types of energy in the total of energy consumption 35 IEA data from 2013(www.iea.org) 56 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Gaz natyror Dru zjarri&mbtje Energji elektrike Ngrohje KOSOVA SERBIA 32 MAQEDONIA 4 0 1 0 1 SHQIPERIA 2 4 6 8 8 8 0 0 0 0 3 4 7 10 12 12 13 19 23 27 28 % E PJESMARRJES 31 32 40 Thëngjill MALI I ZI BOSNIA DHE HERCEGOVINA SEE COUNTRIES Figure 9. Comparison of share of different energy products in SEE countries Electric Energy Consumption per capita36 Konsumi i energjisë elektrike për banor(MWh/banor) 9 8 7 6 5 4 3 2 1 0 8.52 7.02 6.83 4.44 3 2.53 3.21 3.75 5.12 4.64 5 3.89 2.49 Figure 10. Comparison of consumption per capita in the SEE countries and some of the biggest countries in the EU. As indicated Kosovo has bigger per capita consumption of electric energy than Albania and Romania. Electric energy prices 36 IEA official data from 2013(www.iea.org) 57 7.38 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 The diagram below shows the electric energy prices for SEE countries and some EU member states (eurocent/KWh)37. Electric Energy Prices (Eurocent/KWh) 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 Shtëpiak 2015 Industri 2015 Figure 11. Electric Energy Prices for SEE countries and some EU member states As observed, electric energy prices in the household sector are lower than prices for industry sector. Thus, Kosovo the burden of cost of the electro energy system falls with the industry. 37 EUROSTAT data belong to 2015 58 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 2. ANALYSIS OF PROJECTION OF ELECTRIC ENERGY DEMAND ACCORDING TO 3 CONSUMPTION SCENARIOS 2.1. THE BASIS FOR ANLYSIS OF ELECTRIC ENERGY DEMAND With the aim of determining strategic policies for the energy sector, we first need to define the electric energy system demand. This represents a basis for drafting of strategic documents for the energy sector. For this purpose, the working team for drafting the Draft Strategy on Energy has adopted the model of projections of electric energy demand based on some variables such as economic growth, gradual reduction of technical and commercial losses, industrial development, foreseen measures of energy efficiency, diversification of energy sources for meeting the demand etc. The projection of electric energy demand was done based on three consumption scenarios by considering that they represent sufficient options for policymakers to take the right decisions with regards to energy sector The electric energy demand represents the gross consumption of electric energy including: Electric energy demand from end consumers; Electric energy losses in the level of DSO; Electric energy losses in the level of TSO; Unbilled energy in the north of Kosovo; The demand in the area of mining and generation (LLOMAG); Impact of GDP in the electric energy demand; Energy Efficiency measures; The impact of penetration of district heating system. The demand for electric energy for end consumers (net consumption) was used to project the electric energy demand. The distinction between the net and gross consumption was done with the intention of reducing the energy demand as a consequence of: Development of thermal systems – Annex 5; Energy Efficiency – 11 GWh annual reduction of electric energy demand; Use of solar energy for heating sanitary water – 3.65 GWh annual reduction of electric energy demand as a consequence of use of solar energy for hearing water for household use. Development of such elements in the energy sector was considered to play important role in the amount of electric energy demand as well as its cost, because, with reduction of demand, the amount of imports is also reduced. All these factors with impact in electric energy demand are considered as inputs that are included in the model of projection of electric energy demand. The methodology used to project electric energy demand was presented for each scenario hereunder. Projections of economic growth are based in the Economic Reform Program as presented in Table 7. Table 7. Projections of economic growth according to the document: Economic Reform Program Proj. Proj. Proj. Proj. Proj. 2020Real growth of GDP 2016 2017 2018 2019 2025 Low scenario (1) 2.50% 2.50% 2.50% 2.50% 3.00% 59 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Basic scenario (2) High scenario (3) 4.0% 7.50% 4.30% 7.00% 4.30% 6.00% 4.30% 5.50% 4.30% 5.00% Inputs on the impact of energy efficiency measures Analysis of impact of EE in reduction of electric energy demand was based on progress analysis achieved from implementation of mid-term action plans and those planned (see Annex 1 under 1.4.). The impact of expansion of current district hearing systems was based in projections described in chapter 5 of the present Annex. 2.1.1. Projection of the electric energy demand –Low scenario a) The projection of electric energy demand for industrial consumers was done by applying % of GDP based on the lower scenario (1), whereas the projection of demand of commercial and household consumers was done as following: In years where the consumption is not realistic, we initially normalised it and continued based on the trend through linear equations and other impacts in order to reflect a real projection. b) The level of technical and commercial losses for all scenarios was done bsed on the Development Plan of the DSO (Master Plan) which was assessed by the Working team for drafting the Energy Strategy as a real projection. c) The impact of inputs (expansion of thermal energy systems, implementation of energy efficiency measures and use of solar energy for heating the water for family needs) in this scenario is continuation of the trend of recent years which also included the impact of efficiency measures undertaken under the action plan in recent years. Table 8 represents a projection of electric energy demand based on Scenario 1 (low). Table 8. The gross electric energy demand based on the scenario 1. Konsumi sipas llojit te konsumatoreve 220 kV 110 kV Total 220 kV & 110 kV Industria (35kV, 10kV dhe 6/6) Komercial Shtepiak Konsumi Njësia GWh GWh GWh GWh GWh GWh GWh 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 586 91 677 249 776 2,171 3,196 601 93 694 255 789 2,208 3,253 616 95 711 262 803 2,245 3,310 632 98 729 268 817 2,286 3,371 651 101 751 276 833 2,329 3,438 670 104 774 285 849 2,375 3,508 690 107 797 293 862 2,410 3,565 711 110 821 302 875 2,446 3,623 732 113 845 311 888 2,483 3,682 754 117 871 320 901 2,520 3,742 Following the inclusion of the impact of losses and other types of consumption, the gross demand will be as outlined in table 9. Table 9. Gross electric energy demand Total konsumi 2.2. GWh 2016 5,691 2017 5,694 2018 5,700 2019 5,706 2020 5,715 Projection of electric energy demand – Scenario 2 (basic) 60 2021 5,741 2022 5,751 2023 5,776 2024 5,809 2025 5,849 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 a) The projection of electric energy demand for industrial consumers was done by applying % of GDP based on the scenario 2 (basic), whereas for projection of demand of commercial consumers we applied 0.8 of the GDP based on the basic scenario. b) The level of technical and commercial losses for all scenarios was done bsed on the Development Plan of the DSO (Master Plan) which was assessed by the Working team for drafting the Energy Strategy as a real projection. c) The impact of inputs (expansion of thermal energy systems, implementation of energy efficiency measures and use of solar energy for heating the water for family needs) in this scenario was taken as realistic based on planned measures of energy efficiency. Table 10 represents a projection of electric energy demand based on Scenario 2. Table 10. Demand for electric energy based on scenario 2 of electric energy consumption 2016 Konsumi sipas llojit te konsumatoreve 220 kV 110 kV Total 220 kV & 110 kV Industria (35kV, 10kV) Komercial Shtepiak Konsumi Njësia GWh GWh GWh GWh GWh GWh GWh 608 91 699 273 832 2,157 3,263 2017 2018 634 95 729 285 861 2,147 3,293 2019 661 99 760 297 891 2,180 3,368 2020 689 103 793 310 921 2,241 3,472 719 108 827 323 953 2,289 3,566 2021 2022 750 112 862 337 986 2,339 3,662 2023 782 117 899 352 1,020 2,379 3,750 2024 816 122 938 367 1,055 2,415 3,837 851 127 978 383 1,091 2,452 3,925 2025 888 133 1,020 399 1,129 2,490 4,017 Following the inclusion of the impact of losses and other measures in the electric energy demand, the gross demand will be as outlined in table 11: Table 11. Demand for gross electric energy based on scenario 2 of electric energy consumption 2016 2017 2018 2019 2020 2021 2022 2023 GWh 5,802 5,784 5,826 5,902 5,955 6,024 6,084 6,156 Total konsumi 2.2. 2024 6,238 2025 6,330 Projection of electric energy demand – Scenario 3 (high) a) The projection of electric energy demand for industrial consumers was done by applying % of GDP based on high scenario (Scenario 3 of GDP growth), Projection of electric energy demand for household consumers was done similarly with Scenario 2. b) The level of technical and commercial losses for all scenarios was done based on the requirements of the Strategy and Development Plan of the DSO (Master Plan). c) The impact of inputs in this scenario was taken as realistic based on developments in the respective sector. Table 12. Electric energy consumption according to Scenario 3 Konsumi sipas llojit te konsumatoreve 220 kV 110 kV Total 220 kV & 110 kV Industria (35kV, 10kV) Komercial Shtepiak Konsumi Njësia GWh GWh GWh GWh GWh GWh GWh 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 628 94 722 283 867 2,157 3,307 672 101 773 302 928 2,147 3,377 712 107 819 320 983 2,180 3,483 752 112 864 338 1,037 2,241 3,616 789 118 907 355 1,089 2,289 3,734 829 124 953 373 1,144 2,339 3,856 870 130 1,000 391 1,201 2,379 3,971 914 137 1,050 411 1,261 2,415 4,087 959 144 1,103 431 1,324 2,452 4,207 1,007 151 1,158 453 1,390 2,490 4,333 61 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Following the inclusion of the impact of losses and other measures of consumption, the gross demand will be as outlined in table 13. Table 13. Demand for gross electric energy based on scenario III 2016 2017 2018 2019 2020 GWh 5,884 5,942 6,041 6,164 6,253 Total konsumi 2.3. 2021 6,361 2022 6,461 2023 6,577 2024 6,706 Summary of three scenarios Table 14. Summary of scenarios of electric energy demand Skenaret Skenari I Skenari II Skenari III 2016 5,691 5,802 5,884 2017 5,694 5,784 5,942 2018 5,700 5,826 6,041 2019 5,706 5,902 6,164 2020 5,715 5,955 6,253 2021 5,741 6,024 6,361 2022 5,751 6,084 6,461 2023 5,776 6,156 6,577 2024 5,809 6,238 6,706 2025 5,849 6,330 6,848 The following figure presents the curves of long term demand projections of electric energy for the three scenarios. 8,000 Permbledhje e tre skenareve te konsumit 7,500 7,000 6,848 6,500 6,000 5,942 5,784 5,694 5,884 5,802 5,691 6,164 6,041 5,826 5,700 5,902 5,955 5,706 5,715 6,461 6,361 6,253 5,849 5,809 5,776 5,751 5,741 6,330 6,238 6,156 6,084 6,024 6,706 6,577 5,500 5,000 Skenari I Skenari II Skenari III 4,500 4,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Figure 12. The curved lines of electric energy demand The electric energy sector, especially distribution faces many challenges which are of political and institutional nature, among the min ones are, placement of control of the DSO in the North of Kosovo and reduction of electric energy misuse by irresponsible consumers. Overcoming these challenges requires an overarching commitment. 62 2025 6,848 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 3. ANALYSIS OF ADEQUACY OF GENERATION AND BALANCE BETWEEN ELECTRIC ENERGY DEMAND AND GENERATION 2016-2025 3.1. ADEQUACY AND BALANCE BETWEEN ELECTRIC ENERGY DEMAND AND GENERATION. Energy adequacy and balance were analysed based on three scenarios of generation capacities in Kosovo and one basic scenario in Albania. 63 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Table 15. Scenarios for generation capacity development Generation capacities Scenario 1 CONSTRUCTION “K OSOVA E RE” CAPACITY OF 450 in Kosovo OF TPP WITH NET MW WITH THE POSSIBILITY OF CONNECTION OF COGENERATION CAPACITY UP TO 10% OF ITS NET CAPACITY . THE PLANT WILL BE CONSTRUCTED IN LINE WITH ALL ENVIRONMENTAL CRITERIA AS DETERMINED IN Generation capacities in Kosovo Scenario 2 CONSTRUCTION OF TPP “K OSOVA E RE” WITH NET CAPACITY OF 450 MW WITH THE POSSIBILITY OF CONNECTION OF COGENERATION CAPACITY UP TO 10% OF ITS NET CAPACITY . THE PLANT WILL BE CONSTRUCTED IN LINE WITH ALL ENVIRONMENTAL CRITERIA AS DETERMINED IN D D 2010/75/EC; REHABILITATION OF TPP “K OSOVA B” BY BRING IT WITHIN THE ENVIRONMENTAL AND ENERGY EFFICIENCY CRITERIA AS REQUIRED BY DIRECTIVE 2010/75/EC FOR INDUSTRIAL PLANTS , AND BY INCREASING ITS PRODUCTION CAPACITY AT THE DESIGNED PARAMETERS . REHABILITATION IS FORESEEN TO BE DONE IN 2020. CONTINUATION OF OPERATION OF TPP K OSOVA A UNTIL THE TPP K OSOVA E RE IS MADE OPERATIONAL , WITH THE ASSUMPTION THAT K OSOVO WILL MANAGE TO POSTPONE ITS OBLIGATIONS RELATED TO RESTRICTION OF LIFE OF OLD TPP-S DUE TO HIGH RISK OF SECURITY OF SUPPLY. CONSTRUCTION OF GENERATION CAPACITIES OF ELECTRIC ENERGY FROM RENEWABLE ENERGY SOURCES BASED ON THE TARGETS FOR RES (SEE ANNEX 7). Generation capacities in Kosovo Scenario 338 CONSTRUCTION OF TPP “K OSOVA E RE” WITH NET CAPACITY OF 450 MW WITH THE POSSIBILITY OF CONNECTION OF COGENERATION CAPACITY UP TO 10% OF ITS NET CAPACITY. THE PLANT WILL BE CONSTRUCTED IN LINE WITH ALL ENVIRONMENTAL CRITERIA AS DETERMINED IN D 2010/75/EC; REHABILITATION OF TPP “K OSOVA B” BY BRING IT WITHIN THE ENVIRONMENTAL AND ENERGY EFFICIENCY CRITERIA AS REQUIRED BY DIRECTIVE 2010/75/EC FOR INDUSTRIAL PLANTS , AND BY INCREASING ITS PRODUCTION CAPACITY AT THE DESIGNED PARAMETERS . REHABILITATION IS FORESEEN TO BE DONE IN 2020. CONTINUATION OF OPERATION OF TPP K OSOVA A UNTIL THE TPP K OSOVA E RE IS MADE OPERATIONAL , BY RESPECTING THE OBLIGATIONS FOR RESTRICTION OF WORKING HOURS (O LD PLANTS ARE ALLOWED TO WORK 20000 WORKING HOURS DURING THE PERIOD 2018-2023). O N THE INITIATIVE OF 38 Generation capacities in Albania During the adequacy analysis and electro energy system balance, one basic scenario of projections of developing production capacities in the Republic of Albania based on the data from the Albanian TSO, was taken into consideration. 2010/75/EC; REHABILITATION OF TPP “K OSOVA B” BY BRING IT WITHIN THE ENVIRONMENTAL AND ENERGY EFFICIENCY CRITERIA AS REQUIRED BY DIRECTIVE 2010/75/EC FOR INDUSTRIAL PLANTS , AND BY INCREASING ITS PRODUCTION CAPACITY AT THE DESIGNED PARAMETERS . REHABILITATION IS FORESEEN TO BE DONE IN 2020. RECONSTRUCTION OF 4 UNITS OF TPP K OSOVA A ACCORDING TO AN ORDER (SEE THE RESPECTIVE TABLES FOR PRODUCTION CAPACITIES UNDER SCENARIO 3 OF The data are based on assessments of KEK Staff based on designed capacities of units and experience from countries with similar technology plants. 64 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 PRIVATE INVESTORS CONSTRUCTION OF FLEXIBLE HYDRO CAPACITIES FOR FULFILLING THE SYSTEM REGULATORY RESERVE . CONSTRUCTION OF GENERATION CAPACITIES OF ELECTRIC ENERGY FROM RENEWABLE ENERGY SOURCES BASED ON THE TARGETS FOR RES (SEE ANNEX 7). GENERATION IN ANNEX39). O N THE INITIATIVE OF PRIVATE INVESTORS CONSTRUCTION OF FLEXIBLE HYDRO CAPACITIES FOR FULFILLING THE SYSTEM REGULATORY RESERVE . CONSTRUCTION OF GENERATION CAPACITIES OF ELECTRIC ENERGY FROM RENEWABLE ENERGY SOURCES BASED ON THE TARGETS FOR RES (SEE ANNEX 7). Data on generation capacities Table 16: Kosovo generation capacities in generation Scenario 1 GENERATION CAPACITIES 2016-2025 SCENARIO I (KOSOVO) (power available on January at 21:00) Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Curent Generation Kosova A 270 270 270 270 270 270 270 0.0 0 0 Kosova B 520 520 520 520 295 600 600 600 600 600 HPP (Ujman+ existing small) 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 837.5 837.5 837.5 837.5 612.5 917.5 917.5 647.5 647.5 647.5 Total of existing New TPP Kosova e Re 450 450 450 HPP Fleksible (regulatory) 0 0 0 0 New RES 7 15 65 84 94 118 118 125 125 138 7 15 65 84 94 118 118 575 575 588 Total – New TOTAL KOSOVO 844 852 903 922 706 1035 1035 1222 1222 1236 Table 17. The amount of electric energy produced under generation scenario I ENERGY PRODUCED FROM GENERATION 2016-2025 SKENARIO I Year 2016 2017 2018 2019 39 2020 2021 2022 2023 2024 2025 The data on generation capacities in case of construction of TPP Kosova are assessment data made by the KEK staff based on capacities installed and designed when they were constructed during 60-s and 70-s and as such cannot be taken as basic data for decision-making. 65 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Current Generation Kosova A Kosova B Existing HPP Total of existing New TPP Kosova e Re New RES Total new TOTALI GWh 1800 3400 200 5400 1800 3400 200 5400 1800 3200 200 5200 1800 3200 200 5200 1800 2000 200 4000 1800 4200 200 6200 1800 4200 200 6200 0 4200 200 4400 0 4200 200 4400 0 4200 200 4400 0 34 34 5434 0 79 79 5479 0 301 301 5501 0 375 375 5575 0 419 419 4419 0 514 514 6714 0 516 516 6716 3370 548 3919 8319 3370 550 3921 8321 3370 613 3983 8383 Table 18. Generation capacities of two systems when applying generation scenario I in Kosovo and basic scenario of generation capacities in Albania Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 Existing generation Albania 1220 1228 1228 1228 1228 1228 1228 1325 1325 Existing generation Kosovo 837 837 837 837 612 917 917 647 647 New capacities Albania 5 58 139 237 377 447 474 530 605 New capacities Kosovo 7 15 65 84 94 118 118 575 575 TOTAL ALB. + KOSOVO 2069 2138 2269 2387 2311 2710 2738 3078 3152 the 2025 1325 647 692 588 3253 Table 19. Kosovo generation capacities under generation Scenario 2 GENERATION CAPACITIES 2016-2025 SCENARIO II (KOSOVO) (power available on January at 21:00) Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Current Generation Kosova A 270 270 270 270 270 270 270 0.0 0 0 Kosova B 520 520 520 520 295 600 600 600 600 600 HPP (Ujman+ existing small) 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 837.5 837.5 837.5 837.5 612.5 917.5 917.5 647.5 647.5 647.5 Total of existing New TPP Kosova e Re 450 450 450 HPP Fleksible (regulatory) 0 200 200 200 New RES 7 15 65 84 94 118 118 125 125 138 7 15 65 84 94 118 118 775 775 788 Total – New Table 20. The amount of electric energy produced under generation scenario 2 ENERGY PRODUCED FROM GENERATION 2016-2025 SKENARIO II Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 Current Generation Kosova A 1800 1800 1300 1300 1300 1300 1300 0 0 Kosova B 3400 3400 3200 3200 2000 4200 4200 4200 4200 Existing HPP 200 200 200 200 200 200 200 200 200 5400 5400 4700 4700 3500 5700 5700 4400 4400 Total of existing New TPP Kosova e Re 0 0 0 0 0 0 0 3370 3370 HPP Fleksible (reg.) 397 397 New RES 34 79 301 375 419 514 516 548 550 34.12 79.12 300.6 375.1 419.4 513.5 515.6 4316 4318 Total – New 66 2025 0 4200 200 4400 3370 397 613 4380 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 TOTALI 5434 5479 5001 5075 Table 21. Generation capacities of two systems when basic scenario of generation capacities in Albania Viti 2016 2017 2018 Existing generation Albania 1220 1228 1228 Existing generation Kosovo 837 837 837 New capacities Albania 5 58 139 New capacities Kosovo 7 15 65 TOTAL ALB. +KOSOVË 2069 2138 2269 3919 6214 6216 8716 8718 8780 applying generation scenario 2 in Kosovo and the 2019 1228 837 237 84 2387 2020 1228 612 377 94 2311 2021 1228 917 447 118 2710 2022 1228 917 474 118 2738 2023 1325 647 530 775 3278 2024 1325 647 605 775 3352 2025 1325 647 692 788 3453 Table 22. Kosovo generation capacities under generation Scenario 3 GENERATION CAPACITIES 2016-2025 SCENARIO III (KOSOVO) (power available on January at 21:00) Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Curent Generation Kosova A 270 270 270 270 270 270 540 540.0 540 540 Kosova B 520 520 520 520 295 600 600 600 600 600 HPP (Ujman+ existing small) 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 47.5 837.5 837.5 837.5 837.5 612.5 917.5 1187.5 1187.5 1187.5 1187.5 Total of existing New TPP Kosova e Re 450 450 450 HPP Fleksible (regulatory) 0 200 200 200 New RES 7 15 65 84 94 118 118 125 125 138 7 15 65 84 94 118 118 775 775 788 Total – New TOTALI KOSOVA 844 852 903 922 706 1035 1305 1962 1962 1976 Table 23. The amount of electric energy produced under generation scenario ENERGY PRODUCED FROM GENERATION 2016-2025 SKENARIO III Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 Current Generation Kosova A 1800 1800 1300 1300 2200 2200 3600 3600 3600 Kosova B 3400 3400 3200 3200 2000 4200 4200 4200 4200 HPP (Ujman+ existing small) 200 200 200 200 200 200 200 200 200 5400 5400 4700 4700 4400 6600 8000 8000 8000 Total of existing New TPP Kosova e Re 3370 3370 HPP Fleksible (regulatory) 397 397 397 New RES 34 79 301 375 419 514 516 548 550 34.12 79.12 300.6 375.1 419.4 513.5 912.6 4316 4318 Total – New TOTALI 5434 5479 5001 5075 4819 7114 8913 12316 12318 2025 3600 4200 200 8000 3370 397 613 4380 12380 Table 24. Generation capacities of two systems when applying generation scenario 2 in Kosovo and the basic scenario of generation capacities in Albania KAPACITETET E GJENERIMIT NE DISPOZICION 2016-2025 SHQIPERI-KOSOVË (MW) Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Existing generation Albania 1220 1228 1228 1228 1228 1228 1228 1325 1325 1325 67 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Existing generation Kosovo New capacities Albania New capacities Kosovo TOTAL ALB. +KOSOVË 837 837 837 837 612 917 1187 1187 1187 1187 5 58 139 237 377 447 474 530 605 692 7 15 65 84 94 118 118 775 775 788 2069 2138 2269 2387 2311 2710 3008 3818 3892 3993 Table 25. Kosovo generation capacities under generation Scenario 3 GENERATION CAPACITIES 2016-2025 BASIC SCENARIO (Power available January 21:00) Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Current generation MW HPP (Total of big HPP-s) 1050 1050 1050 1050 1050 1050 1050 1050 1050 1050 RES (Small HPP-s, wind, solar) 170 178 178 178 178 178 178 178 178 178 THPP Vlora 0 0 0 0 0 0 0 97 97 97 1220 1228 1228 1228 1228 1228 1228 1325 1325 1325 Total existing New MW HPP (total of big HPP-s) 0 44 109 185 276 307 325 366 415 482 RES (Small HPP-s, wind, solar) 5 14 30 52 100 139 149 164 189 209 TPP ( Total) 0 0 0 0 0 0 0 0 5 58 139 237 377 447 474 530 605 692 Total – New TOTAL 1225 1286 1367 1465 1605 1675 1703 1855 1930 2017 Note: The factor of utilisation of installed capacities for both systems, based on recommendations of ETNSO-E is as following: For photovoltaic plants: PGsol=0, since it is not in production at the peak time at 21:00. For HPP -s PGhc=PG (inst)*0.65, based on hydrologic conditions For wind plants PGera=PG (inst)*0.5, (recommendation of ENTSO-E) For biomass: PGbio=PG (inst)*1.0 Where: PGsol – The power of solar power plant PGhc – The power of Hydro Power Plant PGera – the power of wind power plant Table 26. The amount of electric energy in Albania based on the basic generation scenario ENERGY PRODUCED FROM GENERATION IN ALBANIA 2016-2025 BASIC SCENARIO Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Current generation MW HPP (Total of big HPP-s) 4400 4400 4400 4400 4400 4400 4400 4400 4400 4400 RES (Small HPP-s, wind, solar) 769 769 769 769 769 769 769 769 769 769 HPP Vlora 0 0 0 0 0 0 0 0 0 0 Total existing in Albania (GWh) 5169 5169 5169 5169 5169 5169 5169 5169 5169 5169 New in Albania (GWh) HPP (total of big HPP-s) 0 238 589 999 1489 1657 1752 1973 2239 2600 RES (Small HPP-s, wind, solar) 9 47 104 181 352 488 523 576 663 734 TPP ( Total) 0 0 0 0 0 0 1489 1489 1489 1489 9 286 692 1180 1841 2146 3764 4038 4392 4823 Total – New 68 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 TOTALI 5178 5455 5861 6349 7010 7315 8933 9207 9561 9992 Balance between electric energy generation and demand in generation scenario 1 for Kosovo electro energy system In figure 14 we have presented the balance between electric energy production and demand when the production is implemented based on projections of generation scenario 1 and when it would operate on its own. GWh Balanca e energjisë (gjenerimi I / kerkesa B, L dhe U) 3,000 2,500 2,000 1,500 1,000 500 (500) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (1,000) (1,500) (2,000) (2,500) BALANCA E ENERGJISË I-U Fig. 13. Kosovo. BALANCA E ENERGJISË I-B BALANCA E ENERGJISË I-L The balance between electric energy production and demand under generation scenario 1 in In figure 15 we have presented the balance between electric energy production and demand when the production is implemented based on projections of generation scenario 2 and when it would operate on its own. GWh Balanca e energjisë (gjenerimi II / kerkesa B, L dhe U) 4,000 3,000 2,000 1,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (1,000) (2,000) (3,000) BALANCA E ENERGJISË II-U BALANCA E ENERGJISË II-B BALANCA E ENERGJISË II-L Figure 14. The balance between electric energy production and demand under generation scenario 2 in Kosovo 69 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 In figure 16 we have presented the balance between electric energy production and demand when the production is implemented based on projections of generation scenario 3 and when it would operate on its own. GWh Balanca e energjisë (gjenerimi III / kerkesa B, L dhe U) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (1,000) (2,000) BALANCA E ENERGJISË III-U BALANCA E ENERGJISË III-B BALANCA E ENERGJISË III-L Figure 15. The balance between electric energy production and demand under generation scenario 1 The figure hereunder presents the balance lines between the electric energy production and demand when the market is integrated with Albania GWh 10,000 8,000 6,000 Balanca e Energjisë (Gjenerimi I, II dhe III / Kërkesa B) Pas 2022 eksport ues Deri ne vitin 2020 4,000 Ne vitin 2021 te balancuar 2,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 (2,000) (4,000)BALANCA E ENERGJISË SHQ+KS(I) BALANCA E ENERGJISË SHQ+KS(II) BALANCA E ENERGJISË SHQ+KS(III) Figure 16. The balance between electric energy production and demand under generation scenario 1 70 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Adequacy of generation of electro energy system for the integrated system Kosovo-Albania In figure 18 hereunder you can see the adequacy of generation for the three scenarios of generation in Kosovo and the basic scenario of generation in Albania. Adekuacia e gjenerimit AL-KS(I, II dhe III) MW 600 360 400 423 380 200 0 2016 -200 2017 2018 2019 2020 -400 2021 2022 -252 2023 -800 -917 -1000 -878 -117 2025 -380 -503 -600 -160 2024 -694 -771 -849 Adekuacia e gjenerimit AL+KS(I) Adekuacia e gjenerimit AL+KS(II) Adekuacia e gjenerimit AL+KS(III) Figure 17. Adequacy of the generation system in the integrated market with Albania Table 27. Comparison of results for the balance and adequacy of generation for the three generation scenarios when systems operate within a single common market of electric energy (Kosovo Albania) The energy balance when the system operates alone Scenario 1 Situation almost the same as the current one until 2020. The need for import is 1.5 TWh. After rehabilitation of Kosova B and construction of new capacities of RES, the system will be almost balanced until the year when the TPP Kosova e Re is expected to be constructed, with a tendency of surplus depending on the scenario of demand. After the construction of TPP Kosova e Re there will be electric energy surplus which will mainly be realised during the regime of low loads in the system, with special emphasis during the night. In the aspect of coverage of peak, this scenario is not so promising, considering Scenario 2 By 2020, the balance between production and consumption will be similar to Alternative 1, except for the need for imports during 2018 and 2019 for 500GWh. From 2020 to 2023, the system will be balanced, whereas following the construction of TPP Kosova e Re, and addition of new capacities from RES, the possibility of exporting the surplus will increase to around 2.5 TWh in the subsequent years. 71 Scenario 3 Until 2020, the balance between production and consumption will be similar to Alternative 2. From 2020 to 2023, the system will be almost balanced with a positive tendency, whereas following the construction of TPP Kosova e Re, and addition of new capacities from RES, the possibility of exporting the surplus would be very big ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 Energy balance when the system operates within the common zone with Albania Adequac y of system when the system operates within the common zone as a joint regulator y block, by respectin g the ENTSOE requirem ents. the decommissioning of Kosova A after the construction of Kosova e Re TPP, which only implies replacement of capacities not addition. In the aspect of electric energy production, replacement of TPP Kosova A with the TPP Kosova e Re would have an addition of 1.5 TWh of electric energy. Until the end of 2020 the integrated systems KOSOVO + ALBANIA for the three generation scenarios in Kosovo, will be importers of electric energy, where almost until 2020 both unified systems will need an import of 2TWh of energy. In 2021 in all three scenarios of generation in Kosovo, will be the years with balanced system of electric energy production and consumption, whereas after 2022 the unified system will have a pretty positive balance of electric energy. - - - - - Adequacy is negative for the entire 10 year period. Until 2019 the unified system needs around 850 MW of additional power, whereas after 2020 this power revolves around 550MW, out of which 120 MW should be ensured from imports The need for regulatory reserve is small for the Albanian and Kosovo Electric Energy System The primary and secondary reserve is ensured within the unified system, whereas around 150 MW of the tertiary reserve by 2025 should be ensured from the regional market of support services. KOSTT does not meet the requirement of ENTSO/E for heaving 50% of its regulatory reserve within its regulatory zone Operation under the modus: one regulatory - - - Until 2021 the adequacy of generation remains the same as in scenario AL+KS(I), whereas the construction of flexible HPP in Kosovo with a capacity of 200 MW significantly improves adequacy of generation, with special emphasis on the Kosovo System, a unit that will allow ensuring half of the need for tertiary regulation. The flexible unit and unification of systems will allow integration of capacities from renewable sources Generating capacities of both countries after 2023 will allow ensuring of the regulatory reserve of unified systems KOSTT with a flexible unit of 200 MW will meet the requirement of ENTSO/E because 50% of regulatory reserve will ensured within its 72 - - - Until 2021 the adequacy of generation remains the same as in scenario AL+KS(I) Construction of unified systems is enabled from one nearly balanced system into a system with high potential. After 2023 the adequacy of generation is very positive ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 - bllock/two regulatory zones, enables reduction of costs as a result of the possibility of optimising the work of generators in both countries Diversity of generation and bigger number thereof creates favourable conditions for a competitive market. - regulatory zone, considering that in the unified system the need for tertiary reserve for Kosovo from 450MW will reduce to 337.5MW, and for Albania from 150MW to 112MW Cost reduction as a result of possibility to optimise the work of generators in both countries. 73 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 4. DEMAND FOR COAL UNDER THE THREE ELECTRIC ENERGY GENERATION SCENARIOS The following tables present the calculated amounts of demand of TPP-s for coal. Table 28. Generation Scenario I KERKESA PER THENGJILL(MILION TON) 2016-2025 SKENARI I Viti Kosova A Kosova B TC Kosova e Re TOTALI 2016 2.83 4.25 0.00 7.08 2017 2.83 4.25 0.00 7.08 2018 2.83 4.00 0.00 6.83 2019 2.83 2.50 0.00 5.33 2020 2.83 5.25 0.00 8.08 2021 2.83 5.25 0.00 8.08 2022 2.83 5.25 0.00 8.08 2023 0.00 5.25 3.37 8.62 2024 0.00 5.25 3.37 8.62 2025 0.00 5.25 3.37 8.62 2024 0.00 5.25 3.37 8.62 2025 0.00 5.25 3.37 8.62 Table 29. Generation Scenario 2 KERKESA PER THENGJILL (MILION TON) 2016-2025 SKENARI II Viti Kosova A Kosova B TC Kosova e Re TOTALI 2016 2.83 4.25 0.00 7.08 2017 2.83 4.25 0.00 7.08 2018 2.83 4.00 0.00 6.83 2019 2.83 2.50 0.00 5.33 2020 2.83 5.25 0.00 8.08 2021 2.83 5.25 0.00 8.08 2022 2.83 5.25 0.00 8.08 2023 0.00 5.25 3.37 8.62 Table 30. Generation Scenario 3 KERKESA PER THENGJILL(MILION TON) 2016-2025 SKENARI III Viti Kosova A Kosova B TC Kosova e Re TOTALI 2016 2.83 4.25 0.00 7.08 2017 2.83 4.25 0.00 7.08 2018 2.83 4.00 0.00 6.83 2019 2.83 2.50 0.00 5.33 74 2020 3.45 5.25 0.00 8.70 2021 3.45 5.25 0.00 8.70 2022 4.50 5.25 0.00 9.75 2023 4.50 5.25 3.37 13.12 2024 4.50 5.25 3.37 13.12 2025 4.50 5.25 3.37 13.12 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 5. DEVELOPMENTAL PROJECTIONS OF THERMAL ENERGY SYSTEMS 5.1. DEVELOPMENT PROJECTIONS OF DISTRICT HEATING COMPANY IN PRISTINA CITY “TERMOKOS” 5.1.1. Supply of consumers with thermal energy In November 2014, Termokos started with the supply of consumers with thermal energy acquired through cogeneration system. This system allows the use of thermal energy from turbine steam of Bllocs B1 and B2 of Kosova B. The thermal power available from this system is 2x140MW. However the exchange capacity 2x70MW in the Heat Extraction Station (HES) and the conducting capacity of the thermo conductor of Kosova B TPP – Termokos, DN600 (around 160 MW), currently limit the possibility for using this energy with thermal power of up to 140MW. This project reaches a value of investments of 37 million Euros, and is financed through donations and soft loans (German Government and KfW, EU, Swedish Government, Luxemburg Government, Kosovo Government and Pristina Municipality). The cogeneration project was the impact factor that made Temokos become a company with sustainable technical and financial standards, by gaining the trust of its consumers. At the same time another very important impact of this project is protection of environment and reduction of emissions of gases into the atmosphere. Currently, the district heating system of Termokos has connected consumers with installed power of around 110 thermal MW. 5.1.2. Development projections of district heating system of TERMOKOS For period 2016-020, the planned investments for Termokos projects from donors and different funds, mainly from the German government through KfW, are assessed to be 21.5 million Euros. These investments aim to increase the performance of the company with components of enlargement and modernisation of the distribution network, reduction of energy losses, construction of new thermo-substations and optimisation of the work of thermal energy distribution system (balancing of system, measurement and billing based on consumption etc). In order to meet the increasing demand of the Pristina City for thermal energy (scenarios presented above), Termokos plans to expand and modernise its distribution network. In this respect, the main projects for period 2015-2025, financed by donors and own revenues are: a. Rehabilitation of 300 substations out of 360 existing substations. Rehabilitation implies replacement of heat exchangers and circulation pumps, installation of regulatory system and thermal energy measurement system. b. Replacement of distribution network of 10km (20km pipeline). Critical positions were identified, mainly in the main pipeline and main branching pipelines, where it is considered to have vast loses of water and energy. 75 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 c. Extension of the heating network in the new neighbourhoods, which will be considered after the hydraulic analysis of the network and energy reserves in certain positions. Such analyses are being conducted by consultants hired by the EU, in cooperation with Termokos and Prishtina Municipality. It is planned based on the scenarios presented above, that the additional surface to be connected to the Termokos network, at the end of this period will be 1000,000.00 m² d. Supply of Prishtina city, the part that is connected to the district heating network, with sanitary water. This project, has a value of 10.5 million Euros, and is in the priority list of energy projects which was approved by the government of the Republic of Kosovo. We are providing two scenarios of network expansion, respectively increase of number of consumers and necessary energy for fulfilling their demand, for period 2016-2025. Table 31. Projections of Thermal energy system development by Termokos Medium Scenario High Scenario Connected surface (m²) Energy needed (GWHth) Connected surface (m²) Energy needed (GWHth) 2016 1220539 254 1220539 254 2017 1395539 290 1445539 301 2018 1620539 337 1695539 353 2019 1720539 358 1845539 384 2020 1805539 376 1970539 410 2021 1880539 391 2075539 432 2022 1955539 407 2160539 449 2023 2030539 422 2245539 467 2024 2105539 438 2330539 485 2025 2180539 454 2415539 502 5.1.3. Reduction of losses and energy saving Projects that will be implemented in this period, apart from objectives indicated above, are to reduce energy losses in the network and save it through efficiency measures. 5.1.4. Reduction of water losses Water losses in the distribution network in the city are vast and have a direct impact in the quality of service and performance of the enterprise. The Termokos objective is to reduce these losses from the current situation of 18% to 10% t the end of this period. With reduction of losses, and energy saving there will be a possibility for Termokos to use the same capacity for supplying more consumers. 5.1.5. Measures of efficient use of thermal energy 76 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 It is evident that there are a lot of possibilities for improvement in this respect. The planned projects with impact in this matter are as following: a. Rehabilitation of thermal substations. Rehabilitation of substations also implies undertaking all measures for installation of automatic capacity for measurement of thermal energy. In this way, there will be hydraulic and energy balancing in the network also and as a result of supply of all consumers with the necessary energy pursuant to the standards. b. The pre-insulated pipelines that will be installed in the rehabilitated network, apart from insulation of water losses, they will have an impact in reducing energy losses as a result of thermal insulations of tubes according to standards. c. Improvement of thermo insulation of old public and private buildings, is a good opportunity for saving thermal energy. The new consumers, which are planned to be connected to Termokos network, have acceptable standard of thermo insulations. In this respect, by heaving in its network consumers who meet the standards of thermal efficiency, Termokos observes the opportunity for increasing the number of consumers by utilising the same generation potentials. 5.2. Gjakova city District Heating Company For the period 2016-2020, investments planned for the Gjakova City District Heating Company from donors and different funds from European Commission, (IPA 2 Program), have been ensured in the amount of 11.5 million Euros for the biomass Cogeneration Plant. Whereas with respect to distribution which includes a complete rehabilitation of the network of thermofication and of 20 substations which requires additional .5 Medium scenario High Scenario million Euros which have not been ensured currently. These investments aim to increase the performance of the company and modernisation of the distribution network, reduce energy losses, construct new thermosubstation and optimisation of operation of thermal energy distribution network. (operation with positive business, balancing of system, measurement and billing based on consumption etc.). In the following table, you can see a projection of expansion of network in two scenarios. Table 32. Projections for development of the Gjakova City District Heating Company 77 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Connected surface (m²) Energy needed (GWHth) Connected surface (m²) Energy needed (GWHth) 89914 89914 176933 211933 232933 242933 252933 262933 272933 282933 19 19 44 48 51 53 55 57 59 61 89914 176933 211933 232933 242933 257933 272933 287933 302933 317933 19 37 44 48 51 54 57 60 63 66 Table projection of of demand for capacity based of district heating in the cities such as Peja, Prizren, Gjilan and Ferizaj40. 33 contains a development thermal on the study Table 33. Projection of demand for thermal capacities according to annual growth of 1% The scenario with small growth of 1% annually Year Pejë(MW) Prizren(MW) Gjilan(MW) Ferizaj(MW) 2015 2020 2025 2030 55.38 58.20 61.17 64.29 97.88 102.87 108.12 113.63 48.94 51.44 54.06 56.82 60.27 63.35 66.58 69.98 Table 34. Projection of demand for thermal capacities according to annual growth of 1% Scenario with medium growth of 2% annually Viti Pejë(MW) Prizren(MW) Gjilan(MW) Ferizaj(MW) 2015 2020 2025 2030 57.04 62.98 69.53 76.77 100.82 111.31 122.89 135.68 50.41 55.65 61.45 67.84 62.08 68.54 75.68 83.55 Projections of thermal capacities needed to cover the demand for heating in urban zones of big cities of Kosovo, meet the demand for heating spaces and hot water. Table 35. Calculation of investments for construction of thermal systems in big cities of Kosovo Peja Prizreni Ferizaj Gjilan Projection of investments in case of construction 32,415,118 58,160,671 29,084,342 35,735,475 of thermal capacities in the first stage 40 The study was financed by MED and was implemented in 2012 by the INTECH Institute. 78 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 The list of priority projects of the National Investment Council contains the project for improvement of energy systems of thermal energy in Kosovo through construction of systems in big municipalities in Kosovo. The value of this project was foreseen to be 150 million Euros, however so far it did not meet the support of financial institutions. A short description of the project: Improvement of central heating in Kosovo through applying district heating system in municipalities with heating potential41 Project Aim The aim of the project is to assess the consumption of heating and construct heating systems based on production and/or cogeneration concept for district heating systems in municipalities with relevant heating potential. Through this project, Kosovo will indirectly improve the supply with energy and diversify its energy sources for the heating sector, by improving the wellbeing, quality of life and health of citizens and by diversifying its energy sources. In special cases, the existing project of central heating will also assess the opportunities for expansion of heating system network and improvement of existing heating capacities. Expected results Result 1: Improvement of energy security of supply Result 2: Diversification of energy Result 3: Reduction of consumption and costs of electric energy for heating purposes Result 4: Reduction of CO2 emissions The estimated cost of the project 150 million Euros. There should be a feasibility study beforehand however modalities of financing have not been determined yet. 41 The Project placed in the list of priority infrastructure projects, approved by the National Investment Council based on the Berlin process platform. http://www.kryeministriks.net/tfu/repository/docs/SINGLE_PROJECT_PIPELINE_OF_INFRASTRUCTURAL_INVESTMENTS.pdf 79 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 6. NATURAL GAS Information from application of gas project Albania-Kosovo (ALKOGAP). The Project of gas supplier Albania-Kosovo (ALKOGAP) is about interconnecting the existing and planned gas transmission system of the Republic of Albania (including TAP and IAP projects) with the future project of gas transmission system of the Republic of Kosovo, and interconnectors of transmission, which are a part of eastern branch of the Energy Community Gas Ring (ECGR). This project aims to create new pipelines for supply with natural gas from the Middle East and Caspian Region, through transportation from Trans Atlantic Gas Pipeline, in the north-east of the West Balkans zone towards Serbia. The pathway/possible pipeline of gas supply will be assessed in two scenarios: 1.LezhePrishtinë: This scenario assumes that IAP will move on to implementation stage 2. Fier-Lezhë-Prishtinë: This scenario will be considered if lack of progress is noticed in implementation of IAP. Possible links of Pristina in the direction of Nis (Serbia) and Pristina in the Direction of Skopje (FYROM) will be assessed. Security of supply – Benefits from this project include: -presentation of a more ecologically acceptable source of energy in the region (replacement for wood logs, coal, oil and supplement for renewable energy, and potential for increasing cogeneration and coproduction) – facilitation of gasification of a considerable part in east of Albania and the entire territory of Kosovo, increase energy security in Albania and Kosovo, by ensuring diverse supply with gas in the region, by ensuring access in the capacities of Albania, ensuring important transit capacity and income for Albania and Kosovo. Create preconditions for supporting the regional concept South East European Gas Ring. Reduction of CO2 emission in the region and facilitation of economic development. Competition – Construction of this gas supplier will enable gasification of Albania and Kosovo, and will ensure a diverse and credible supply with natural gas. It was emphasised that Albania, Kosovo and Montenegro are the only isolated countries in Europe when it comes to gas supply. This project, around 260 km long, would create preconditions for further development of natural gas market in Albania and create and develop markets of natural gas in Kosovo in the projected annual level of 2 bcm (1- 1.3 bcm for Albania and 0.5-0.7 bcm for Kosovo). It would be possible to increase the capacity (double or triple), in case ALCOGAP is used to supply Serbia and other countries with gas from the Middle East and the Caspian, by achieving a regional integration of the gas market. Sustainability – The benefits from this project include: Benefits from this project include: presentation of a more ecologically acceptable source of energy in the region (replacement for wood logs, coal, oil and supplement for renewable energy, and potential for increasing cogeneration and coproduction);– facilitation of gasification of a considerable part in east of Albania and the entire territory 80 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 of Kosovo, increase energy security in Albania and Kosovo, by ensuring diverse supply with gas in the region, by ensuring access in the capacities of Albania, ensuring important transit capacity and income for Albania and Kosovo. Create preconditions for supporting the regional concept South East European Gas Ring. Reduction of CO2 emission in the region and facilitation of economic development. Short description of the project This project, around 260 km long, would create preconditions for further development of natural gs market in Albania and create and develop markets of natural gas in Kosovo in the projected annual level of 2 bcm (1- 1.3 bcm for Albania and 0.5-0.7 bcm for Kosovo). It would be possible to increase the capacity (double or triple), in case ALCOGAP is used to supply Serbia and other countries with gas from the Middle East and the Caspian Region, by achieving a regional integration of the gas market. Cost - 200 million Euros Current status – The project was approved to be a part of the priority list with interest for Energy Community from Groups within the ECS. At the end of 2016 it is expected to be approved from the Energy Community Council of Ministers. 300 thousand Euros have been allocated from WBIF platform for preparation of feasibility study. 81 ENERGY STRATEGY OF THE REPUBLIC OF KOSOVO 2016-2025 ANNEX 7. PROJECTIONS FOR DEVELOPMENT OF POWER PLANTS FROM RES Table 36. Electric energy production capacities from RES, according to RES targets pursuant to basic scenario that was taken into consideration during the analysis of energy balance and generation adequacy Note: The assessment of development of generation capacities from RES, namely, wind, solar, biomass was done by the Division responsible for RES within the MED based on obligations under ECT. The table hereunder includes projection of generation capacities from RES which are subject to support from support schemes. In the table of data for generation capacities in three scenarios, we have presented a projection of HPP in fulfilling the need for system regulation (Scenario 2 and 3). Table 36. Projection for development of plants for production of electric energy from RES RES targets (MW)-Basic scenario 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Photovoltaic Energy 2 2 4 4 5 5 6 6 7 7 8 8 9 9 10 Solid biomass 2 2 4 4 5 7 7 9 9 11 11 13 13 14 14 Energy from wind 41.35 51.35 62.15 62.15 70 110 110 120 120 130 130 140 140 150 150 Existing small HPP 73 73 73 73 73 73 73 73 73 73 73 73 73 73 73 New HPP-s 61 76 91 100 107 110 110 120 120 140 160 180 200 220 240 Total 179.35 204.35 234.15 243.15 260 305 306 328 329 361 382 414 435 466 487 End of document 82
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