A 1930s-vintage coal plant in Kosovo

A 1930s-vintage coal plant in Kosovo

In 2013, the World Bank pledged to stop loaning money for new coal energy projects, unless no financially feasible alternatives exist. President Obama has said the same for the United States, in a 2013 speech: “I’m calling for an end of public financing for new coal plants overseas—unless they deploy carbon capture technologies, or there’s no other viable way for the poorest countries to generate electricity.”

In Kosovo a proposed coal-fired power plant has been under discussion for over a decade. The prime funders, ironically, are the World Bank and the U. S. government.

The landscape of energy no longer favors coal. Renewable energy and energy efficiency technologies costs continue to plummet. The World Bank and the U. S. government’s decision to fund this project or not will set a critical precedent for the future of coal financing, making Kosovo the global gatekeeper for new coal projects.

In fact, coal has become an increasingly risky investment in terms of energy, climate, and health. In a recent analysis performed in conjunction with colleagues from the Balkans we have found that the clean energy path is not only better for human and environmental health — it is simply less expensive.

Solar hot water and IT in Prizren, Kosovo

Solar hot water and IT in Prizren, Kosovo

The World Bank and the U.S government now have the opportunity and to set the international energy and climate investment agenda. Distributed renewable energy resources and energy efficiency are simply faster to deploy to meet local needs than the arduous process of building out new centralized coal facilities. Delay on adopting a clean energy policy for the region slows down not only the provision of critically needed energy resources that can spur economic growth, but also the larger process of EU integration, which is a regional priority.

The range of options available to the World Bank to replace an aging coal-fired power plant in Kosovo allows for technological innovation that avoids a one-size fits-all approach. Solar, wind, small-scale hydropower, biomass, and energy efficiency projects can all combine to form a reliable electricity mix and shift the conversation away from single-technology solutions. Not every site may be appropriate for solar, wind, small-scale hydropower or biomass, but winners can emerge based on local conditions. The highly adaptive nature of renewables and energy efficiency investments distributes capital investment risk instead of channeling all resources into coal projects.

New research on the hazards of particulate matter to human health and the environment from low-quality lignite coal intensifies the concern for the current generation of Kosovars. Pollution control technologies that claim “clean” coal are expensive patchwork investments that do not address problems of coal mining, climate change, or ash byproducts. A price on carbon hammers the nail in the coffin. World Bank President Jim Kim has already publicly advocated for the inclusion of a $30/ton carbon shadow price on all proposed World Bank projects. Therefore, it only makes sense that coal, the highest carbon-emitting electricity generation source per kilowatt-hour, becomes the most expensive option among the abundance of low-cost, low-carbon renewables including solar, wind, small-scale hydropower, biomass, and energy efficiency.

The World Bank and the U.S. government face an historic choice and a chance to tip the energy and climate conversation. They can side with the emerging data and studies of clean energy economics to chart a reliable low-cost, and low-carbon pathway to renewable energy and green jobs. Failure to seize the moment would violate the prohibitions on coal projects that each institution has recently pledged. It is time to chart a sustainable path for people in need of energy now.

Comments

  1. Garret Tankosic-Kelly Principal at SEE Change Net
    Sarajevo, BiH - http://seechangenetwork.org/
    April 29, 2015, 10:56 am

    Dear Nate,

    Perhaps I could help out a little bit on the second question you ask around 100% RES and grids in the context of Kosovo as a perspective EU member state.

    You may be aware that the stated 2050 goal of the EU is an 80-95% reduction in CO2 emissions from a 1990 base by 2050.
    This effectively means the decarbonization of the entire grid so yes that is exactly what is being planned and yes it will require bridging fuels such as gas, pump storage and other storage technologies that are as yet not mature.

    And since Kosovo, through the Energy Community, will become a part of a much larger Energy Union, this burden of cost will not be inflicted solely on a tiny nascent state.

    However since the idea of ignoring costs is problematic for you I ask you to imagine this scenario – which should make mad every right thinking Kosovar and EU taxpayer – and that is that they/we pay plus 1 billion euros for a coal plant which becomes a stranded asset 20 years from now.

    I ask you the same question I asked D.B. Pfeiffer and that is, if the citizens of Kosovo were going to spend a billion plus of their own money wouldn’t they prefer to spend it on a safer, cleaner more efficient energy system that would have more jobs than dirty lignite and would bring them closer to EU targets on energy…?

  2. Garret Tankosic-Kelly Principal at SEE Change Net
    Sarajevo, BiH - http://seechangenetwork.org/
    April 29, 2015, 6:58 am

    Dear D.B. Pfeiffer,

    I agree with you about the current toxic situation but I think the WB and the US Institutions bear – with the Kosovo Government – quite a lot of responsibility for the current dire situation. If you want more on this your should read http://kfos.org/pathology-of-a-delay/

    Regarding the proposed new plant we are talking about loans in the order of 1 billion euros which the Kosovar citizens will end up paying for one way or the other and by investing in coal they are ensuring their country will never meet EU membership targets in the energy sector.

    In addition, as a several commentators have pointed out the single tender bid is extremely untransparent and past experience of high level corruption – as outlined in our recent report – tends to raise very large question marks over this kind of proposed transaction.
    http://seechangenetwork.org/winners-and-losers/

    And even larger questions about the unsecured costs of cleaning up all those polluting open pit mines
    http://www.theguardian.com/commentisfree/2015/apr/28/big-coal-keep-it-in-the-ground-energy-opencast-mines

    So if the citizens of Kosovo were going to spend a billion plus Euros of their own money wouldn’t they prefer to spend it on a safer, cleaner more efficient energy system that would have more jobs than dirty lignite and would bring them closer to EU targets on energy…?

    We are currently developing an energy model (one of seven for the region) which will show this is eminently possible, we invite you to take a look!
    http://seechangenetwork.org/call-for-evidence/

  3. Nate G
    United States
    April 22, 2015, 5:23 am

    Dr. Kammen

    A couple of questions: will the new coal plant replace the existing plant or simply expand grid electric capacity? I ask because if Kosovo needs *additional* electricity capacity, it is difficult to use efficiency measures to avoid using electricity you currently don’t use. Further, it seems disingenuous to force “efficiency” on the people of Kosovo when their electricity consumption is ~3 MWh/y, relative to the highly efficient Germans ~8 MWh/y. (from world bank data).

    Second, is your proposal that Kosovo take a “Dr. Mark Jacobson” approach to the electricity grid and use 100% renewable? Despite large subsidies and a tremendous amount of existing infrastructure, even the Germans cannot do this. Traditional power plants are needed to back up renewable unless very special conditions exist (large amounts of load following renewable such as hydro or geothermal). Thus, your proposed solution implicitely requires that Kosovo build some form of load follow generation. Maybe natural gas, maybe large pumped hydro reservoirs. Whatever. But to ignore these costs is a diservice to rigorous adademic commentary on public policy proposals that truly influence people lives. Its hard not to get mad when you see people that already have an electricity system (and have imported coal power from other US states for decades, as California has done) criticize those that want an electricity system.

    Nate

  4. Dan Kammen
    Berkeley, CA
    April 20, 2015, 3:01 pm

    Dear DB,
    Actually, I would disagree. The purpose of our analysis is not to deny coal-fired energy to Kosovo, but to highlight (as we do in the paper) that we find that there are clean energy options available that:

    – more than meet the current and projected demand in Kosovo
    – can do so at lower cost than coal (even without health
    costs included)
    – can do so more rapidly, and with greater job creation.

    Kosovo may well still choose the coal-fired option due to inertia, but from a technical and economic basis, the clean energy options are very significant. This is actually not about denying energy access to Kosovo at all, but about speeding and increasing those resources and opportunities.

    The analysis is available at:
    https://rael.berkeley.edu/project/sustainable-energy-for-kosovo-and-southeast-europe/

  5. D.B. Pfeiffer
    Paris, France
    April 18, 2015, 9:54 am

    Coal is being used widely in the world. Kosovo has one of the world’s largest deposits, albeit brown coal. The newly independent and poor country depends on an old Yugoslav- built electricity generation plant which uses that coal and belches out toxic and foul smelling fumes. But new technologies to be incorporated into a new plant would minimize the negative aspects of using the coal and provide Kosovo’s people with a cleaner environment and a resource upon which to build a competitive economy, one which would allow it to reduce its astronomical unemployment level and give its young population a future.
    To suggest the World Bank and U.S. not assist Kosovo to build such a new plant and decommission the old one is to condemn Kosovars to a bleak future indeed. The proposals to build that future on the use of alternative, clean energy production is noble but naive. Kosovars have lived without reliable electricity in the homes and businesses for decades. To tell them – and those assisting them – to opt for solar, wind, hydro-power and biomass sounds good but is impractical as a solution to their current situation. In time Kosovo and other countries can work toward alternative energy solutions but cleaner energy can more quickly and cheaply be produced using its coal resources. And technology can make it less polluting. Pushing for cleaner energy makes more sense in putting pressure on the big producers of coal based energy in north American, Europe, and Asia rather than picking on poor Kosovo, a country of only two million people whose economy and human welfare are stymied by a lack of reliable electricity when it has the resource at hand to produce it. Trying to stop Kosovo from using its coal is just plain cynical.