Kosovo's Electricity Supply Stable, No Price Hikes Till April 2022

Electricity (Free Image)

Electricity supply to consumers in Kosovo is currently stable, while prices on the European markets have begun to decrease and that in turn increases price stability, BETA has learned from the Kosovo Ministry of Economy, which is also in charge of energy. There have been no major investments in Kosovo's electricity sector since the construction of two production units of the Kosovo B power plant - block A in 1983 and block B in 1984, while the Kosovo Energy Corporation (KEK) has secured some lignite reserves. 

"Kosovo does not have other fuel reserves except minimal stockpiles of fuel oil. Given that domestic production from existing power plants and other renewable sources does not cover domestic demand, there is a need for imports when demand rises," Ministry representatives said.

The Kosovo energy system relies on market capacities, which are more accessible now because imports can be arranged through a new 400 kV interconnection with Albania, the officials added.

Electricity prices for regulated consumers, in the absence of "proper" market functioning, are set by the Energy Regulatory Office and according to a decision made in October this year, electricity tariffs in Kosovo will remain the same for the course of this tariff year, which lasts until April 2022.

"Estimates say that the defined tariffs, which will cover the maximum revenues permitted, will enable regulated operators to perform operative functions in optimal conditions and will ensure that buyers get a stable supply," the Ministry officials said.

Last year, as they put it, 15% of electricity needs were met from renewable energy sources, but since production depends on the weather its effect on Kosovo's overall energy production may change on an annual basis.

The total capacity of electricity production in Kosovo in 2020 was 1,110 MW, 960 MW or 86.5% of which came from power plants, while the rest was from renewable energy sources in hydropower plants, wind power plants and photovoltaic panels.

In 2021, several other capacities were included in electricity production. The Energy Regulatory Office is continuously gathering data on their production, which it will unveil in 2022.

The Economy Ministry reps said that in the event of shortages and an energy price hike, with the approval of maximum permitted revenues and tariffs, the Energy Regulatory Office would also take into account an increase in import prices, which are beyond operators' control.

"However, an increase in revenues, as a result of increased electricity production, has neutralized the total costs of electricity supply and so the permitted revenues will not reflect an electricity price hike for end consumers in the tariff year of 2021, whereas they will be assessed for the tariff year of 2022," the officials added.

At the same time, they pointed out, bearing in mind the non-functioning of the energy boundary between Kosovo and Serbia, the entire cross-border capacity will not be enough to secure the necessary imports, and so consumers are recommended to use electricity efficiently.

Kosovo's great dependence on electricity imports is also expected in the period of a capital overhaul of the Kosovo B power plant's production units in 2022 and 2023, so the line ministry said electricity tariffs may rise.

On the occasion of the 1000th edition of Beta Monitor, a specialized economic bulletin focused on South East European countries, Beta News Agency is releasing a series of articles on energy available free of charge on www.beta.rs in Serbian and on www.betabriefing.com in English.